PMI suggests manufacturing recession threat
The growth of Eurozone manufacturing, as reflected in the Purchasing Manager’s Index (PMI), has slowed to a crawl, raising fears that the economic recover in the area is over.
The PMI shows actual changes in activity rather than what changes are expected, is at a four-month low for the area overall, with the greatest declines being posted by France, Germany, and Spain.
These declines reflect economic trends in the rest of Europe. Reports of the slowdown have increased speculation that the European Central Bank will order interest rates to remain at 2 percent, the same level they have held for nearly two years.
Even though Gross Domestic Product (GDP) figures will likely show that this measure of economic health has improved over 2004s year-end report, further slowdowns are expected in the second quarter of 2005.
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