Eurozone manufacturing growth eased to a 14-month low in March as rising inflation and geopolitical tensions took their toll, according to a survey released on Friday.
The final S&P Global/CIPS manufacturing purchasing managers’ index for the region fell to 56.5 from 58.2 in February. Still, it remained above the 50.0 mark that separates contraction from expansion.
The rise in geopolitical tensions was cited as a factor weighing on demand. It also had an impact on business confidence, which slumped to its weakest level since May 20202.
The weaker upturn was accompanied by an intensification of supply chain pressures over the month as rising Covid infections in China and the conflict in Ukraine reportedly led to longer lead times.
Chris Williamson, chief business economist at S&P Global, said: “Just as the fading of the latest pandemic wave was creating a tailwind for the eurozone manufacturing recovery, with economies re-opening and supply chain bottlenecks easing, the war In Ukraine has created an ominous new headwind.
“While the boost to demand from the further relaxation of Covid-19 containment measures helped ensure a sustained expansion of manufacturing order books and output in March, rates of growth have cooled markedly amid sanctions, soaring energy costs and new supply constraints linked to the war.”