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Spain PMI manufacturing contraction eases Eurozone manufacturing PMI falls again in August
(about 1 hour later)
Spain's manufacturing decline was less marked in August than in July but the sector is still shrinking, according to closely-watched survey. Manufacturing output across the 18-country eurozone shrank again in August, according to a widely-watched survey.
The Purchasing Managers' Index (PMI) for the sector was 44.0 in August, better than July's reading of 42.3. The Purchasing Managers Index (PMI) showed the region's manufacturing sector contracted despite factories cutting prices.
But any reading below 50 indicates contraction and Spain's manufacturing sector is still in recession. Markit's final PMI was 45.1, above July's three-year low of 44.0.
The improvement between the months was largely due to the export sector, where the pace of decline eased most sharply. However, the figure was the 13th month in a row that it was below the 50 mark, which indicates growth.
But Andrew Harker, economist Markit, which provides the survey data, said the numbers were poor. "The data again make grim reading as business conditions in the sector continued to deteriorate at a marked rate," he said. The traditional stronger countries of Germany and France failed to provide support to the weak ones.
He said it marked the 16th month in a row of decline, and there seemed little prospect of any improvement before the end of the year. Germany's PMI read 44.7 in August, its sixth monthly fall in a row.
Spain went into recession at the end of last year. Italy and Spain's readings have been below 50 for more than a year.
The government expects the economy to shrink this year and next as cuts in public spending bite. Only Ireland saw manufacturing output rise.
Elsewhere in the eurozone, Irish manufacturing growth slowed sharply in August to 50.9 in August from a 15-month high of 53.9 in July, a figure that still indicates growth, however. Irish manufacturing growth slowed in August to 50.9 in August from a 15-month high of 53.9 in July, a figure that still indicates growth, however.
Senior economist Rob Dobson at Markit, which collects the data, said the figures were bleak: "Larger nations like France and Germany remain in reverse gear... the [manufacturing] sector is on course to act as a drag on gross domestic product in the third quarter."
The gross domestic product (GDP) latest figures for the three months to the end of June showed the eurozone as a whole contracted by 0.2% and no growth is expected until next year.
The European Central Bank (ECB) is meeting on Thursday to discuss monetary policy.
Economists are expecting the bank to cut interest rates at some point to a new record low of 0.5%.