The euro area manufacturing PMI for June was confirmed at 45.8, down from 47.3 in May, pointing to a continued contraction in the manufacturing sector. The decline indicates that the manufacturing sector continues to face difficulties, with Italy being the only member state to show a slight improvement.
National data for June showed Greece at 54.0, Spain at 52.3, the Netherlands at 50.7 and Ireland at 47.4. Italy recorded a slight improvement at 45.7, while France was at 45.4, Austria at 43.6 and Germany at 43.5. All of these figures reflect multi-month lows that are insufficient to suggest a strong recovery.
Cyrus de la Rubia, chief economist at the Hamburg Commercial Bank, stressed that despite the decline in PMIs in most eurozone countries, this trend appears to be a “temporary upswing” rather than a sign of a long-term recession. He noted that the global economic recovery provides a “favorable backdrop” for eurozone manufacturers. Moreover, optimism about future production remains as high as it was in May, indicating continued confidence among businesses heading into next year.
But de la Rubia also pointed to a worrying trend of an accelerating decline in new orders. The decline follows a record 25 consecutive months of declining demand. Despite a temporary improvement in May, June's data suggests a significant recovery is likely to be “postponed” until at least the late summer or early fall.
Read the full final Eurozone Manufacturing PMI report here.
