Euro zone manufacturing growth slipped unexpectedly in May.
The RBS/NTC Purchasing Managers Index (PMI) survey showed output prices growing at their slowest pace in 14 months, which may ease some concerns that inflationary pressures is set to accelerate, even as employment growth remains strong.
The PMI fell to 55.0 last month, its lowest since February 2006, from 55.4 in April, surprising many economists who had predicted a slight rise to 55.5 - but still signalling above-trend economic growth.
Among the big four euro zone nations, Germany and Spain showed weaker growth while Italy and France picked up.
Financial markets showed little reaction to the data.
With the index well above the long-run average and the 50.0 mark separating growth from contraction, the data did not shake firm expectations of one, or possibly two, more European Central Bank interest rate rises this year.
A Reuters poll on Wednesday showed all 83 economists surveyed expected a quarter point ECB rate hike to 4.0 per cent next week, with 66 saying rates would climb to 4.25 per cent or higher by year-end.
The slowdown in the euro zone data contrasted with an unexpected pick-up in British manufacturing activity, with the strongest growth in production seen in eight months.
A similar report on the US manufacturing sector due today from the Institute of Supply Management is expected to show a modest improvement in May.
Meanwhile British manufacturing activity accelerated unexpectedly in May. The increase was due to the strongest growth in production in eight months, with factory gate inflation picking up to equal a record high, a survey today showed.
Reuters