'Slump' in eurozone manufacturing

1 July 2011 Last updated at 10:36 GMT The figures showed weakness across the board Growth in the eurozone's manufacturing sector lost steam in June as both exports and domestic demand slowed, falling to an 18-month low, a key survey has shown.

Markit's Manufacturing Purchasing Managers' Index (PMI) fell to 52.0 last month from 54.6 in May, its lowest reading since December 2009.

Any reading above 50 indicates growth.

Separate figures for May showed eurozone unemployment stable at 9.9%.

"Increasing numbers of countries are showing signs of sliding back into recession," Markit said.

Italy's manufacturing sector shrank for the first time in 20 months, while Spain's contracted for the second month in a row.

Growth in the German and French sectors slowed considerably, while the UK's manufacturing expansion fell to a 21-month low.

Gilles Moec, senior European economist at Deutsche Bank, said the data reflected two main factors: inflation hampering consumer demand and the end of stimulus measures in a number of regions, including the US.

"The weakness is no longer simply in the peripherals, it's now moving to Italy for instance," he told the BBC.

"This is painting a different picture from the one we had a few weeks ago."

Unemployment

The stable unemployment figures for May were widely expected by economists.

The European statistics agency, Eurostat, said 15.51 million people were out of work in May - an increase of 16,000 on the previous month.

However, the unemployment total is far lower than the same month a year ago, down by 551,000.

Unemployment was highest in Spain at 21% with joblessness among under 25's running at 44%.

Monthly figures for Greece were not available.

View the original article here

Toyota forecasts slump in profits

10 June 2011 Last updated at 08:08 GMT Japanese car makers have been operating at reduced capacity due to a shortage of parts Japanese car giant Toyota has said it expects profits for this financial year to be sharply lower than last year, due in large part to the massive earthquake in March that disrupted production.

The carmaker forecast net profits of 280bn yen ($3.5bn; ?2.1bn) for the year to the end of March, down a third on the 408bn yen it made last year.

It said revenues would fall slightly to 8.2 trillion yen.

Toyota has said it hopes to return to 90% capacity in Japan this month.

Earthquake impact

Profits in the first half of the year would be hit particularly hard, the company said.

Thereafter, business is expected to pick up, although the effects of the earthquake and resulting tsunami would be felt for a long time, the world's largest carmaker said.

"The Japanese economy is expected to pick up gradually. However, the damage done by the Great East Japan Earthquake was widespread and serious, and will continue to affect the Japanese economy," the company said.

It added that emerging markets should continue expanding, particularly China and India, while more developed economies such as the US and those in Europe should "continue recovering at a modest pace".

However, it highlighted rising oil prices and high unemployment, particularly in the US, as key risks to future sales.

Slipping sales

Toyota said it expected to sell 7.24m vehicles during the full year, with 2.92m of those sold in the first six months.

In the calendar year 2010, Toyota sold 8.42m vehicles, just beating its closest rival General Motors, which sold 8.39m.

As a result of the earthquake, Toyota is likely to lose its position as the world's best-selling car brand, a position it has held since 2008.

Some analysts have speculated that it may even slip to third place behind Volkswagen, due in part to issues that existed before March's disaster.

"Toyota is in a period of restructuring its production after years of expansion," said Kazuyuki Murai at Plaza Asset Management in Tokyo.

"It is still not equipped with the ability to deal with rising demand in emerging markets. I think Toyota will be in for a sluggish period."

The earthquake also hit the carmaker's performance during the last financial year, with profits between January and March down 77% to 25.5bn yen from a year earlier.

View the original article here