The Markit Eurozone Purchasing Managers' Index for the eurozone manufacturing dropped from 46.8 in March to 46.5 in April in a flash estimate, which is subject to revision.
The region's PMI Composite Output Index, measuring production for manufacturing and service industries, has been less than 50, which indicates a contraction, for 19 of the past 20 months, Markit said. New orders fell for the 21st consecutive month, the research firm said.
Germany, which has the largest economy in the region, saw the biggest drops in six months in overall business activity and in new orders. France, on the other hand, with the region's second largest economy, saw rates of decline in business activity and new orders "ease sharply to the slowest for four and eight months, respectively," the report said.
For the region, backlogs of work orders dropped for the 22nd consecutive month. In response, "the ongoing deterioration in the order book prompted firms to cut payroll numbers for the 16th month running," Markit said.
"Although the (composite) PMI was unchanged in April, the survey is signalling a worrying weakness in the economy at the start of the second quarter, with signs that the downturn is more likely to
intensify further in coming months rather than ease," said Markit Chief Economist Chris Williamson.
"Thanks to an upturn in the survey at the start of the year, the PMI suggests that euro area GDP fell by
around 0.2-0.3 percent in the first quarter after a 0.6 percent drop at the end of last year. However, the April reading points to a 0.4 percent rate of decline, with downside risks," he said.
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