On Tuesday we had a look at the UK's manufacturing PMI figures; it's now time for a glimpse at the state of manufacturing across the English Channel. Unsurprisingly, the Ukrainian crisis is hurting Eurozone manufacturers as well with the PMI hitting a 13-month low at 50.7.
France and Italy were the usual suspects with PMIs below 50 - indicating contraction in manufacturing activity. France saw its PMI in negative territory for the fourth consecutive month, down to 46.9 in August, while Italy dropped below 50 to 49.8 for the first time since June last year. Spain provided a glimmer of hope with the second highest PMI in the Eurozone (after Ireland) at 52.8, despite slowing down in August.
On the upside, the UK's manufacturing PMI continues to outperform the Eurozone average. While we shouldn't crack open a bottle of champagne just yet given the dismal state of the Eurozone, the UK has now outperformed Europe's manufacturing powerhouse Germany for 17 months in a row. On the downside, troubles in the UK's largest trading partner spill over to the UK in the form of depressed demand for British manufactured products.
Eurozone countries got some relief yesterday when the ECB announced a further cut on rates and an asset buying program short of Quantitative Easing (QE). The ECB measures should help ease credit conditions and combat deflation but whether they will go far enough to fast-track the Eurozone's painful recovery is doubtful.