Euro Zone Employment, Manufacturing Fall

“It is evident that euro zone manufacturers are still finding life very difficult amid challenging conditions,” Howard Archer, chief European economist at IHS Global Insight in London, was quoted saying of the Markit report. “Domestic demand is being handicapped by tighter fiscal policy in many euro zone countries, still squeezed consumer purchasing power, and rising unemployment.”

Germany’s manufacturing indicator fell to 48.4, its lowest level in three months, from 50.2 in February, according to the Markit report. In France, the indicator fell even further, dropping to 46.7 from 50. “There were further signs that the manufacturing malaise already exhibited at the periphery of the currency bloc was spreading to the core,” Markit said in its report. “Demand was weaker in both domestic and export markets.”

Markit also said that a new orders indicator fell faster in March than it had in February, and its employment indicator fell as well. In a statement, Chris Williamson, chief economist at Markit, said, “The prospects for April also look poor, with companies reporting steeper rates of decline for both new orders and backlogs of work. At the same time firms saw their production costs rise sharply, largely as a result of high oil prices.”