Manufacturing costs in the eurozone dropped for the first time since the mid-2020 in March, a survey showed on Monday, but that activity at struggling factories throughout the region fell further as customers were suffering from rising living costs cut back.
The final S&P Global Purchasing Managers’ Index (PMI) for manufacturing dropped to 47.3 in March from 48.5 in February, slightly above the preliminary estimate of 47.1 but still below the 50 threshold separating growth from contraction for the ninth consecutive month.
“Eurozone manufacturing remains in troubled waters, with factories reporting a fall in demand for goods for an eleventh straight month amid the surging cost of living, tighter monetary policy, a shift to inventory destocking and subdued customer confidence,” said Chris Williamson, chief business economist at S&P Global.
Input prices declined for the first time since July 2020, thanks to lower energy costs and mending supply chains. The sub-index fell from 50.9 to 46.8.
That decline allowed firms to raise prices at the slowest pace in over two years, which is likely good news for European Central Bank policymakers who have so far been unable to bring inflation down anywhere near their 2% target.