Factory slump in France and Germany rock struggling EU

FACTORY output is falling in France and Germany as storm clouds gather over the eurozone economy.

Manufacturing contracted in both countries, says a survey by research group IHS Markit, suggesting a downturn at the end of last year continues.

As the French and Germans power the eurozone economy, it is feared there could be a major knock-on effect across the bloc.

Markit’s index of manufacturing, where anything below 50 means it is shrinking, came in at 49.6 in France this month, its lowest for three years. In Germany, it was 45.6.

A slump in demand for diesel cars due to pollution fears, and a crackdown on global trade by US president Donald Trump are thought to be causes.

For the eurozone as a whole, the Markit reading was 47.8.

Chris Williamson, of Markit, said it suggests quarterly eurozone growth of 0.2pc. He added: ‘The data add to worries that the economy has failed to rebound with any conviction from one-off factors that dampened activity last year.’

Germany this week slashed its 2019 growth forecast from 1pc to 0.5pc.