(MENAFN) A recent study by S&P Global has revealed that manufacturing activity across the Eurozone, consisting of 20 countries, is witnessing a continued decline, primarily attributed to a slowdown in Germany, the region's leading economy. According to the Purchasing Managers’ Index (PMI) for manufacturing, the figure dropped slightly from 46.6 in January to 46.5 in February. While this is marginally higher than the preliminary reading of 46.1, it remains below the critical 50-mark that separates growth from contraction for the 20th consecutive month.
The report highlights that total factory output in the Eurozone continued to contract in February, maintaining the same rate as in January. However, it notes that manufacturers were successful in clearing orders pending completion. The persistently challenging industrial landscape in the Eurozone is exemplified by the fact that the region has been in an industrial recession for the past year.
The chief economist at Hamburg Commercial Bank, Cyrus de la Rubia, commented on the data, expressing concern that the Eurozone's industrial recession shows no signs of abating. He emphasized that output has declined at a consistent pace, with Germany and France, the heavyweight economies in the region, being significant contributors to this trend.
The report specifically points out that the German economy experienced its sharpest deterioration in four months in February. Additional research by S&P Global this week indicated that German manufacturing activity fell well below expectations, signaling an accelerated economic downturn.
De la Rubia acknowledged that while the softer decline in input prices across the Eurozone in the past month could partly be attributed to geopolitical tensions in the Red Sea, it is more likely influenced by movements in commodity prices, such as the recent surge in oil prices. He stressed that the fundamental trend of lower demand remains the primary driver of faster delivery times, indicating a persistent challenge for Eurozone manufacturers.
As the Eurozone grapples with ongoing economic headwinds, particularly in the manufacturing sector, the data underscores the need for concerted efforts to address the underlying factors contributing to this prolonged period of contraction. Policymakers, businesses, and analysts are closely monitoring the situation, seeking insights into potential remedies to revive industrial activity and stimulate economic recovery across the Eurozone.
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