“Euro-area manufacturing output contracted for a 21st straight month in April, adding to pressure on the European Central Bank to cut interest rates to spur lending and growth.
A gauge of manufacturing in the 17-nation euro area declined to 46.7 last month from 46.8 in March, London-based Markit Economics said today. That’s above an initial estimate of 46.5 on April 23. A reading below 50 indicates contraction.
With the euro-area economy mired in a recession, the ECB’s Governing Council will cut its benchmark rate today to a record low 0.5 percent from 0.75 percent, according to the median of 70 economists’ estimates in a Bloomberg News survey. The Frankfurt- based central bank sees the economy shrinking 0.5 percent in 2013.
“There is nothing here to suggest that manufacturing will turn the corner and stabilize any time soon, putting greater onus on policy makers to act quickly to reinvigorate growth,” Chris Williamson, chief economist at Markit, said in today’s report.
The euro pared losses against the dollar after the data were released, trading at $1.3172 at 10:41 a.m. in Brussels, down less than 0.1 percent on the day.
