Business News

Euro zone manufacturing growth slowest in 6 months

European factories expanded at a weaker pace than predicted in May, as growth slowed in all nations apart from the Netherlands and Spain.

The recovery in the region's manufacturing sector slowed as new orders and employment eased and companies reported a sharper cut in inventories of purchased goods.

Data provider Markit's Purchasing Managers' Index (PMI) for European manufacturing slowed to 52.2 in May, down from 53.4 in April and coming in lower than the earlier flash estimate of 52.5.

Read MoreWill sex and drugs boost Europe's growth?

A worker checks pieces of finished product at the Sko-Die Inc. custom metal manufacturing facility in Morton Grove, Illinois.
Tim Boyle | Bloomberg | Getty Images

Almost all of the nations covered saw their PMI remain above the 50.0 mark separating expansion from contraction, but only the Netherlands and Spain reported faster rates of growth. In Spain, factory output growth hit a four-year high, rising to 52.9 in May from 52.7 in April – the highest reading since April 2010.

May marks Spain's sixth straight month of growth as new orders continued to increase at a solid rate.

Read MoreEuro zone businesses see strongest quarter in 3 years

Chief economist at Markit, Chris Williamson said the weaker than expected figure will inevitably add to the clamour for policymakers to provide a renewed, substantial boost to the region's economy and ward off the threat of deflation.

"The survey also highlights some encouragingly strong national performances, especially among previously-troubled member states such as Spain and Italy, where productivity improvements and competitive pricing have helped boost sales.These gains suggest that long-term structural reforms are helping to lift demand," said Williamson.

"The main disappointments in the May surveys were in fact found in the core and France in particular is one boat which is not being lifted by the rising tide," he added.

Read MoreManufacturing booms in periphery, unemployment unchanged

Germany, Europe's largest economy saw its manufacturing sector expand at its weakest rate in seven months in May as factory output grew more slowly than the previous month and job creation was almost stagnant.

Outside of the the euro zone, British manufacturing activity kept expanding at a rapid pace as new orders were strong and factories took on more staff.

The Markit UK Manufacturing PMI came in at 57.0 in May, slowing slightly from 57.3 the previous month.

Follow us on Twitter: @CNBCWorld