Euro zone factory output and jobs fall
The PMI survey's employment index fell to 46.7 in June, its lowest since January 2010
By CFOWorld staff | CFO UK | Published 15:30, 02 July 12
Factory orders in the euro zone nations fell in June as job cuts came at the fastest rate in two and a half years, according to new data on Monday.
Factories were also preparing for worse to come, Markit's euro zone manufacturing purchasing managers' index (PMI) showed.
The index was unchanged at 45.1 in June, above the preliminary reading of 44.8 and holding at its lowest reading since June 2009.
Anchored below 50 mark that divides growth and contraction for almost a year now, the survey again showed factories in the region's two biggest economies, Germany and France, are succumbing to a downturn that started in southern Europe.
Companies are clearly preparing for worse to come, cutting back on both staff numbers and stocks of raw materials at the fastest rates for two-and-a-half years," said Chris Williamson, chief economist at data provider Markit.
The PMI suggests that the goods-producing sector contracted by around 1 percent in the second quarter, with this steep rate of decline looking set to accelerate further as “we move into the second half of the year".
Released on the heels of a summit of European Union leaders in which they agreed to help Spain and Italy borrow more affordably, the survey only highlighted the huge challenge policymakers face in restoring the currency union's economic fortunes.
Alarmingly, the survey's employment index fell to 46.7 in June, its lowest since January 2010, from 47.1 in the previous month, signalling accelerating job cuts.
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