Euro zone factories hit hard in June, job cuts rise

Monday, July 2, 2012
By Paul Martin

By Yati Himatsingka
Reuters.com
Mon Jul 2, 2012

Euro zone manufacturing took another hefty blow in June and factories are preparing for worse to come, according to business surveys on Monday that showed jobs were cut at the fastest rate in two-and-a-half years.

Markit’s Eurozone Manufacturing Purchasing Managers’ Index (PMI) was unchanged at 45.1 in June, above the preliminary reading of 44.8 and holding at its lowest reading since June 2009.

Anchored below 50 mark that divides growth and contraction for almost a year now, the survey again showed factories in the region’s two biggest economies, Germany and France, are succumbing to a downturn that started in southern Europe.

Companies are clearly preparing for worse to come, cutting back on both staff numbers and stocks of raw materials at the fastest rates for two-and-a-half years,” said Chris William son, chief economist at data provider Markit.

The PMI suggests that the goods-producing sector contracted by around 1 percent in the second quarter, with this steep rate of decline looking set to accelerate further as we move into the second half of the year.”

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