Eurozone manufacturing stagnates
by Brian Turner
Manufacturing growth in the Eurozone portion of the European Union has slowed nearly to the point of stagnation.
This has raised fears that the area’s economic recovery is about to reverse course. The overall Purchasing Manager’s Index (PMI), which shows actual changes in activity levels rather than expectations, for the area is at a four-month low.
This is in line with various economic news from all over Europe.
The decline in the PMI is probably due to higher oil prices and the strength of the euro as opposed to the dollar. Declines in the PMI were greatest in France, Germany, and Spain.
Even though the Gross Domestic Product (GDP) figures in the first quarter are expected to show improvement over the end of last year when they are reported, economists expect further manufacturing slowdowns in the second quarter.
This news adds fuel to speculation that the interest rates set by the European Central Bank will remain at 2 percent, where it has been for almost two years.
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