Financial News: Eurozone Manufacturing Growth Reaches 47-Month High

Eurozone Manufacturing Growth Reaches 47-Month High

(RTTNews) - The euro area factory activity expanded at its strongest pace in nearly four years in April as manufacturers front-loaded their orders due to fears of the war-induced price increases and supply shock, final data from S&P Global showed Monday.

The manufacturing Purchasing Managers' Index rose to a 47-month high of 52.2 in April, in line with flash estimate, from 51.6 in March.

"Although the PMI has risen to its highest for nearly four years, the survey is more a cause for alarm than celebration," S&P Global Market Intelligence Chief Business Economist Chris Williamson said.

"Producers are concerned not only that the war will dampen demand, building on existing headwinds such as US tariffs and the Ukraine war, but also that war-related supply shortages will curb production in the months ahead," Williamson added.

Production posted its strongest growth since last August. At the same time, new orders grew the most since March and also marked the biggest rise in four years. At the same time, new export orders rose for the first time in just over four years.

Sales growth was supported by front-loaded purchasing, reflecting clients' expectations of price rises following the war-induced energy price and supply shock. Factories raised their buying volumes to the greatest extent since mid-2022. Raised purchasing volumes exerted pressure on manufacturers' supply chains in April. However, both pre-and post-production inventories decreased in April.

Manufacturers reduced their headcounts in April despite backlogs of work increasing. Input cost inflation hit a 46-month high and output charge inflation accelerated to a 39-month record.

Business optimism weakened from February's four-year high. Growth expectations slumped to their lowest since November 2024.

The survey showed moderate rates of growth across the four largest euro area economies. While Germany showed a slight slowdown from March, France and Spain registered fresh upturns and Italian factory conditions improved at a faster pace. The expansion in Germany's manufacturing activity moderated in April as manufacturers expect the fallout from the war in the Middle East to eventually lead to lower production in the coming months. The factory PMI posted 51.4 in April, down from March's 46-month high of 52.2. The flash reading was 51.2.

France's manufacturing sector expanded at the fastest pace since May 2022. The factory PMI posted 52.8 in April, as estimated, up from 50.0 in March.

Italy's manufacturing activity reported sustained growth despite signs of subdued demand. The factory PMI rose to 52.1 from 51.3 in March. The score signaled the fastest growth in four years.

Spain's manufacturing activity returned to growth for the first time since last November. The index advanced to 51.7 in April from 48.7 in the previous month.

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