Euro-area fac­to­ries cut prices at fastest pace since 2013

The Pak Banker - - MARKETS/SPORTS -

Euro-area fac­to­ries cut prices at the fastest pace in al­most three years in Fe­bru­ary, com­pound­ing an al­ready wor­ri­some in­fla­tion en­vi­ron­ment for the Euro­pean Cen­tral Bank.

Markit Eco­nom­ics said the price gauge of its man­u­fac­tur­ing Pur­chas­ing Man­agers In­dex fell fur­ther below the key 50 level, drop­ping to the low­est since June 2013. All coun­tries bar one in its monthly sur­vey re­ported fall­ing out­put prices, in­clud­ing Ger­many, France and Italy, the re­gion's three largest.

The re­port comes a day af­ter data showed con­sumer prices in the euro re­gion fell an an­nual 0.2 per­cent in Fe­bru­ary, the most in a year. With ECB pol­icy mak­ers due to meet next week, the mount­ing cat­a­logue of neg­a­tive num­bers may prompt them to in­crease their stim­u­lus pro­grams again. Chris Wil­liamson said the re­port sug­gests that "de­fla­tion­ary pres­sures have in­ten­si­fied." "With all in­di­ca­tors -- from out­put and de­mand to em­ploy­ment and prices -- turn­ing down, the sur­vey will add pres­sure on the ECB to act quickly and ag­gres­sively to avert an­other eco­nomic down­turn," he said.

The head­line man­u­fac­tur­ing PMI num­ber slipped to 51.2 in Fe­bru­ary from 52.3 in Jan­uary, sig­nalling a slower pace of ex­pan­sion. The read­ing was slightly above the ini­tial es­ti­mate of 51 pub­lished on Feb. 22.

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