This morning saw the release of the latest flash PMI manufacturing data, with both Germany and France failing to pick up pace from a recent slump in the eurozone economy. Germany came in weaker than expected with a reading of 44.5 in April, well below the 50.0 mark separating growth from contraction. The figure made for disappointing reading for the largest economy in Europe, despite it being slightly up on the previous month, which came in at 44.1. Meanwhile, the flash France manufacturing PMI registered at 49.6 in April, down from an expected reading of 50.0 and the 49.7 recorded in March.
The euro was pulled down half a percent following the readings, giving the pound a boost to €1.1556 at just after 9am UK time.
While the eurozone as a whole was also impacted, with the PMI coming in weaker than expected at 47.8 for April.
However, while analysts were anticipating a reading of 47.9, the number is still at a two-month high.
Chris Williamson, Chief Business Economist at IHS Markit described the eurozone economy as having started the second quarter of the year on “disappointing footing”.
He said: “The flash PMI fell to one of the lowest levels seen since 2014.
“The data add to worries that the economy has failed to rebound with any conviction from one-off factors that dampened activity late last year, and continues to show only very modest growth in the face of headwinds from slower global demand growth and subdued economic sentiment.
“The surveys indicate that quarterly eurozone GDP growth has slowed to just under 0.2 percent.
“A similar 0.2 percent rate of expansion is being signaled for Germany but France stagnated and the rest of the region has moved closer to stalling.”
The latest numbers are just the latest in a string of economic woes for Germany, with the government this week slashed its growth forecast for 2019.
The federal government has lowered its growth forecast for 2019 to 0.5 percent, down from an already lowered estimate of 1.0 percent.
Initial gross domestic product (GDP) growth expectations for this year were once as high as 1.8 percent.
However, the German government is insisting momentum is expected to pick up in 2020 where growth of 1.5 percent is expected.
Economy Minister Peter Altmaier said trade disputes and Brexit uncertainty were weighing on the German economy.