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Eurozone Manufacturing Growth Slumps in March on Russia’s Invasion of Ukraine

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woman turning buttons of the machine in the factory

Eurozone manufacturing growth fell sharply last month as Russia’s invasion of Ukraine hampered supply chains, slowed down demand, and crashed confidence.

Source: S&P Global

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S&P Global’s final manufacturing Purchasing Managers’ Index (PMI) dropped to a 14-month low of 56.5 from February’s 58.2, but still well above the 50 level that separates growth from contraction.

The output index, which feeds into composite PMI, plunged to 53.1 from 55.5, its lowest level since June 2020, when the bloc was struggling with the first wave of COVID-19 virus.

Chris Williamson, the chief business economist at S&P Global, stated that the war in Ukraine had created a new headwind for economies reopening from the COVID-19 pandemic.

Williamson further noted that growth rates had slowed down significantly on sanctions, rising energy costs, and new supply chain issues linked to the war.

Overall demand growth eased as factories increased prices due to the rising input costs. Exports orders decreased for the first time since June 2020.

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