Eurozone manufacturing index at 13-month low

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Companies attributed the sustained increase in staffing levels to solid growth of new orders and output, alongside a continued accumulation of backlogs of work (a by-product of robust demand testing capacity).

This indicated a faster improvement in the health of the country's manufacturing economy than in the previous month, but pointed to a modest upturn that was weaker than the series trend.

New orders contracted to the fastest pace since July 2017 while new export orders fell to the lowest since December 2016.

"A consistent theme so far this year has been fragile demand conditions and subdued volumes of incoming new work".

Five out of the eight nations covered (the Netherlands, Germany, Italy, Spain and Greece) registered slower rates of growth than in the prior month. "But uncertainty in exports has increased significantly, and the dependence of the Chinese economy on domestic demand is rising", said Zhong Zhengsheng, director of Macroeconomic Analysis at CEBM Group.

IHS Markit said optimism among manufacturers dipped to a five-month low in April as concerns about Brexit, trade barriers and the overall economic climate remained widespread.

In response, firms passed on higher costs to their clients by again raising selling prices.

However on a bright note, input inflation appears to soften as input cost inflation remained broadly in line with the historical average, albeit still rising sharply. All of the nations covered registered an increase in charges, with the steepest seen in Germany and the weakest in Greece.

The manufacturing sector recorded its 20th straight month of expansion last month, although the pace of growth has steadied over the past six months, according to figures out yesterday.

While the headline index improved over the month, IHS Markit said the details of the report were less impressive. House building was the main category of activity to experience robust growth in April.

Some economists predicted a gradual slowdown of Chinese economic growth throughout 2018, although the 6.8 percent year-on-year GDP growth was unchanged in the first quarter compared with that in the last three months in 2017, with investment growth in manufacturing and infrastructure both moderating. Strikes, bad weather and unusually high levels of illness have also plagued businesses.

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