Markit's Eurozone Manufacturing Purchasing Managers Index (PMI) fell to its lowest reading since mid-2009 in May this year to 45.1 points, down from 45.9 in April and little-changed from the earlier flash estimate of 45.
The weak PMI number reflected a drop in eurozone manufacturing production, following a similarly marked reduction in new orders. Companies reported weaker demand from both domestic and export markets. New export orders fell by their greatest margin since November last year, reflecting both slower global economic growth and lower levels of intra-eurozone trade.
Germany, Spain and Greece all reported especially marked reductions in new export orders, while Ireland was the only nation to signal an expansion of even modest note in May and to report an increase in either total order books or new export business.
Chris Williamson, chief economist at Markit, said, "The rate of decline is nowhere near as severe as that seen at the height of the 2008-09 crisis, but the situation is nevertheless deteriorating at an alarming rate. The data suggest that the sector is contracting at a quarterly rate of around one percent, suggesting that manufacturing will act as a major drag on economic growth in the second quarter. In the absence of any resolution to the crisis, the fall in the euro provides a glimmer of hope, providing a much needed boost to beleaguered exporters. But, with new export orders falling at the fastest rate for six months in May, there is little sign yet of any beneficial impact."