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Eurozone manufacturing activity contracts: survey

01 July 2008, 12:09 CET

(BRUSSELS) - Manufacturing activity in the 15 countries sharing the euro contracted in June for the first time for three years, according to a survey on Tuesday.

The eurozone's purchasing managers' index (PMI) for the manufacturing sector, compiled by data and research group Markit, slid to 49.2 points in June, from 50.6 in May, up slightly from an initial estimate of 49.1.

With manufacturers struggling with the euro's strength, high commodities prices and weakening export markets, the fall brought the index below the 50-point level indicating a contraction in activity for the first time since mid-2005.

"The weakness in manufacturing activity in June was widespread across the eurozone," said economist Howard Archer at economists Global Insight.

"German activity slowed to its second-lowest level since September 2005, although it remained well in expansion territory.

"However, the PMI pointed to contracting activity in France, Italy, Spain, Austria and Ireland. Activity was particularly weak in Spain and Ireland, adding to the deepening gloom on these economies."

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