The financial crisis continued to exact a toll on countries from Europe to Asia, forcing manufacturing lower as consumers and businesses alike tightened belts. Even in such export powerhouses as China and India, factory orders were down.
Reuters reported Wednesday that Markit's Eurozone Purchasing Managers' Index (PMI) for the manufacturing sector dropped far below the magic number 50 that separates contraction from growth, hitting 44. That’s its lowest level since June 2009. In June of this year it was 45.1.
That made July the eleventh straight month of contraction for factories in the eurozone. Not only Greece, Italy and Spain had shown dismal results, but France and even Germany slowed. Britain’s PMI was at its lowest level in more than three years, despite gearing up for the Olympics. That lessens the chance that the games will help the U.K. pull out of its slump.
Spain contracted for the fifteenth straight month. Italy was down for a year. Greece has been in negative territory since September of 2009, and even Turkey saw manufacturing activity fall for the first time in four months. Ireland, however, bucked the trend, with its PMI coming in above 50 for the fifth month in a row.
The output index fell as well, hitting its lowest level since May 2009 at 43.4. It was revised downward from 43.6 and was down from June’s 44.7. According to Markit, this indicated that production was dropping at more than 1% per quarter.
In Asia, the news wasn’t rosy either. Although it wasn’t in negative territory, China's official factory PMI dropped to its lowest level in eight months at 50.1 in July. While the HSBC China PMI rose to 49.3, the highest it has been since February, it was still the ninth straight month below 50.
South Korea saw manufacturing activity fall by the most in seven months, and Taiwan also contracted once more. India suffered the sharpest single-month growth drop since September of last year.