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Eurozone manufacturing slump deepens

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(Globalpost/GlobalPost)

The downturn in the 17-nation eurozone's manufacturing sector deepened sharply in March, with even powerhouse economy Germany dragged down, a key survey showed Tuesday.

The Markit Eurozone Manufacturing Purchasing Managers Index fell to 46.8 points in March, up from an initial estimate of 46.6 but well short of the already weak 47.9 posted in February.

The outcome left the closely followed indicator at a three-month low and below the 50-points boom-bust line since August 2011.

The average PMI for the three months to March was 47.5 points, which Markit said was the best performance since the first quarter of 2012, but the latest figures showed a clear deterioration across the eurozone.

Germany at 49 points slipped to a two-month low while "rates of decline gathered pace in all the other nations ... with the exception of France," Markit said in a statement.

France stood at 44 points, a three-month high, while Italy was on 44.5, its lowest for seven months and Spain on 44.2, a five-month low.

Markit warned that the data suggested worse could be to come, after recent figures had allowed analysts to hope that the economy might have finally touched bottom.

Manufacturing "looks likely to have acted as a drag on the economy in the first quarter, with an acceleration in the rate of decline in March raising the risk that the downturn may also intensify in the second quarter," Markit chief economist Chris Williamson said in a statement.

"The surveys paint a very disappointing picture across the region, with all countries either seeing sharper rates of decline or -- in the cases of Germany and Ireland -- sliding back into contraction," Williamson said.

He said the Cyprus bailout appeared not to have had any impact so far but "the concern is that the latest chapter in the (eurozone debt) crisis will have hit demand further in April."

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http://www.globalpost.com/dispatch/news/afp/130402/eurozone-manufacturing-slump-deepens