Eurozone manufacturing activity contracts: survey

AFP

Posted at Feb 02 2009 05:45 PM | Updated as of Feb 03 2009 01:45 AM

BRUSSELS - Manufacturing activity in the 16 countries using the euro retreated in January, although not as fast as in recent months, according to a survey released on Monday.

The eurozone's purchasing managers' index (PMI) for the manufacturing sector, compiled by data and research group Markit, rose to 34.4 points from 33.9 points in December, slightly below a first estimate of 34.5.

Although the rise marked the first improvement in the index since August it remained well below the 50-point threshold, indicating that activity is in contraction.

Describing the result as "an extremely weak report," economist Howard Archer at consultants IHS Global Insight "it is difficult to draw any real comfort from January's survey."

"Completing the worrying picture, the extreme weakness in manufacturing activity in January was widespread across the eurozone, with all countries seeing very sharp contraction in activity," he added.

"Indeed, Germany's manufacturing sector is now suffering particularly markedly as it is hit by sharply contracting export orders."