Today’s PMI figures show that the Eurozone crisis is threatening to engulf the core nations. Countries such as Germany and France are now under risk of being pulled down with the likes of Greece and Spain.
The PMI data released today shows that manufacturing levels throughout the Eurozone has shrunk with only Austria and Ireland struggling to achieve any growth. The biggest surprise was Germany; the manufacturing powerhouse of Europe today posted shrinkage as it only achieved a score of 46.2 (Any number under 50 denotes shrinkage).
Unemployment rose throughout the Eurozone to its highest levels since the single currency was formed in 1995. It rose to 10.9% in March with youth unemployment rising to a staggering 22.1%. This means that over 3.345million young adults under the age of 25 are now out of work.
Today’s results raise further doubt over the Austerity measures that have been enforced throughout the Euro nations.
Markit, which compiles the PMI survey said; “Austerity in deficit-fighting countries is having an increasing impact on demand across the region. German manufacturing output showed a renewed decline, attributed by many firms to weak demand from southern Europe. As such, it is hard to see where growth will come from in coming months, unless export demand picks up strongly from countries outside of the euro zone
Manufacturing in the euro zone took a further lurch deeper into a new recession in April, as such; it is hard to see where growth will come from in coming months, unless export demand picks up strongly from countries outside of the Eurozone. The ECB’s latest forecast of merely a slight contraction of GDP this year is therefore already looking optimistic.”
If figures continue to worsen then the recession could hit harder than feared. Britain and Spain have both entered a double dip recession lately, joining Ireland, Italy, the Netherlands, Portugal, Greece and Slovenia. Only time will tell if the big players suffer a similar fate.
One point of good news was that Belgium managed to edge itself out of recession posting growth of 0.3%.
The Pound to Euro exchange rate is currently trading at 1.231
The Pound to US Dollar exchange rate is currently trading at 1.619
The Euro to US Dollar exchange rate is currently trading at 1.314
The Euro to Pound exchange rate is currently trading at 0.811
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