Manufacturing in the eurozone is continuing to contract, IHS Markit’s latest survey shows (JEAN-FRANCOIS MONIER )

Brussels (AFP) – Eurozone business growth was at its lowest level since 2014, a closely watched survey said on Thursday, dragged down by stagnation in France and a sluggish Germany.

Beset by looming political risks such as Brexit and weaker global growth, the eurozone is struggling to keep the economy growing at a healthy pace, a survey from data firm IHS Markit showed.

The disappointing survey data indicates “that quarterly eurozone GDP growth has slowed to just under 0.2 percent,” said Chris Williamson, an IHS Markit economist.

“Manufacturing remained the key area of concern, with output continuing to contract at one of the fastest rates seen over the past six years,” he added.

IHS Markit said its composite eurozone PMI fell to 51.3 points in April — a 3-month low — from 51.6 points in March. 

A reading above 50 points indicates an expansion, and the long-term trend appears to be heading towards stagnation.

While services remained in expansion, manufacturing in both France and Germany, which together count for half of the eurozone economy, were in contraction territory, IHS Markit said.

The composite reading for France rose somewhat to 50.0 points, up from 48.9 points the previous month, an IHS statement said.

The data for Germany was a slight improvement from the previous month, “but the expansion was merely in line with the modest overall rate of growth seen in the first quarter,” IHS said.

The outlook for the European economy has darkened in recent weeks.

The International Monetary Fund on April 9 sharply lowered its growth outlook for the eurozone, to just 1.3 percent in 2019, a big cut from 1.6 percent just three months earlier.

European Central Bank chief Mario Draghi a day later warned of risks weighing on growth in the eurozone, describing current economic indicators as “weak”.

However, the ECB chief added: “”The estimated probability of recession remains low.”

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.