Eurozone manufacturing struggles

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A string of surveys showing the health - or otherwise - of manufacturing across the eurozone has been published by IHS Markit.

A reading above 50 signals growth, below registers contraction.

In Gemany it was at 44.4 in April, up marginally from March's 80-month low.

The measure for French rose to 50.0 in April, which IHS Markit said signalled "a stabilisation in the goods-producing sector".

In Italy, PMI rose to 49.1 but remains in downturn, IHS Markit said.

Less stockpiling

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UK April manufacturing PMI fell to 53.1 in April, from 55.1 in March.

The figures appear to indicate that stockpiling by factories ahead of Brexit has started to ease - but still taking place.

"Companies noted that the delay to the scheduled Brexit date meant they had to ensure levels of key inputs remained sufficiently large to cover as broad a range of outcomes as possible in coming months," said Rob Dobson, a director at IHS Markit,

CBI records unprecedented stockpiling

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The CBI's latest survey of the manufacturing sector has recorded a slight pick-up in pace.

Perhaps more significantly it also registered an unprecedented acceleration in stockpiling of raw materials, work in progress and finished goods.

Rain Newton-Smith, CBI chief economist, said: “UK manufacturing activity is just about holding up, but the unprecedented pace of stockpiling suggests that Brexit contingency planning stayed at the forefront of manufacturers’ minds."

Investment intentions for the year ahead remained poor but were less negative compared to recent quarters across all categories surveyed, the CBI said.

Eurozone's 'gloomy expectations'

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The markets are digesting the disappointing news on German and French manufacturing sectors.

Germany's manufacturing PMI was barely higher than the previous month and France's was a fraction lower. Both remained below 50 and therefore reflecting contraction in the sector.

Taking overall PMI data, including services, gives a much healthier reading of 51.3, down from 51.6 the previous month.

"It's still not in recession territory by any means but is pointing to rather subdued and uninspiring economic growth, and this is reflected in the gloomy expectations," said Chris Williamson, chief business economist at IHS Markit.

The PMIs, if maintained, indicated second-quarter GDP growth of just under 0.2%, he said.

Most European stock indexes are marginally lower with Paris down most at 0.3%.

Euro falls on PMI data

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The euro has dropped following the latest eurozone manufacturing data.

The euro is down 0.3% against the dollar at $1.1261.

The euro has fallen against sterling at £0.8643.

French and German manufacturing still in contraction

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Latest Purchasing Managers' Index (PMI) data for the eurozone shows that manufacturing continues to contract in both Germany and France.

The German manufacturing sector figures showed a marginal rise to 44.5, still below expectations of 45 and well below the 50 point level which would mark a shift to expansion.

Manufacturing output in France fell for a third straight month from 49.7 to 49.6 and is at a 13-month low. It had been expected to rise to 50.

For the entire bloc, manufacturing rose to a two-month high at 47.8, but remains deep in contraction territory.

US manufacturing output remains unchanged

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US manufacturing output remained unchanged in March.

Put together with two monthly declines previously, the latest data marks the biggest quarterly decrease in production since 2017, at 1.1%.

Vehicles and parts production fell 2.5% in March, however overall manufacturing output rose slightly by 0.2%, if vehicles and parts are excluded.

Manufacturing of computer and electronic products and primary metals contributed by rising in March.

Manufacturing accounts for 12% of the US economy.