European car and parts output slumps to six-year low as continent’s woes continue
The European automobiles and parts sector remained in a strong downturn in April, according to data company IHS Markit.
Read more: EU slashes its forecast for German growth as it predicts Eurozone slowdown
Output, new orders and employment all fell sharply last month, IHS Markit said, in more bad news for Europe’s struggling manufacturing sector.
Yesterday the European Commission halved its 2019 growth prediction for Germany – Europe’s manufacturing powerhouse – to just 0.5 per cent, citing weak demand and new emissions tests hurting margins.
The headline purchasing managers' index (PMI) figure, a widely-watched indication of the health of the sector, fell to a six-year low of 43.2. A score of under 50 indicates contraction since the previous month.
The figures are compiled from responses to IHS Markit's European PMI surveys, covering over 8,000 private sector companies in 11 European countries.
Output expectations at car and parts firms were the most pessimistic since 2012.
Other manufacturing sectors also recorded falling output in April, notably metals and mining and chemicals. The former posted the strongest decline since November 2012.
Economists and policymakers have blamed a global slowdown, tariffs slapped on the EU by the Trump administration last year, and US-China trade tensions for European manufacturing’s woes.
In a tale of two economies, IHS Markit said the beverages and food, software and services, financial services and real estate sectors all saw a growth in output in April.
While demand for more expensive items such as cars has slumped, household spending on essentials and services has held up, economists say.
Read more: Eurozone manufacturing sector contracts with Germany shrinking fastest
Yesterday Valdis Dombrovskis, vice-president for the euro at the European Commission, said that “robust domestic demand, steady employment gains and low financing costs” should help boost growth in Europe in 2020 after a weak 2019.