SMM News: despite the resumption of GDP growth in the first quarter, the manufacturing sector in the euro zone is still in deep trouble.
In April, the final PMI value of the French manufacturing industry was 50, which was higher than the expected and initial value of 49.6. The German data was 44.4, the fourth consecutive month in a row in the contraction range, slightly lower than the previous value and forecast of 44.5.
In the euro zone, the final value of manufacturing PMI in April was 47.9, higher than the expected and initial value of 47.8. Although this figure beat the six-year low of 47.5 set in March, it was also the third month in a row that it was below the withered glory line.
"at the beginning of the second quarter, the eurozone manufacturing industry was still in a deep recession," said Chris Williamson, chief business economist at IHS Markit, a data compilation agency. Although the PMI of the four largest member countries has risen from the previous month, and the eurozone may be boosted by this, it is too early to see it as a turning point. "
In addition, new orders fell for the seventh month in a row, and the output index, which measures factory production, fell about 1 per cent on a quarterly basis. Williamson believes this indicates that the commodity production sector will become a major drag on the economy in the second quarter.
In the first quarter, however, the eurozone economy withstood pressure from outstanding Brexit, trade negotiations between the US and continued weakness in the auto industry, rebounding to its fastest pace of 0.4 per cent in three quarters.
What surprised the market most was that Italy finally escaped the recession, with GDP returning to a positive growth rate of 0.2% quarter-on-quarter. Italy's economy is likely to grow faster than expected in 2019, the economy minister said.
In terms of unemployment, eurozone data fell to 7.7 per cent in March, the lowest level since September 2008. Taken together, the eurozone economy is still resilient.