Eurozone manufacturing activity contracted in June amid an accelerating decline in production, new orders and employment, according to the latest HCOB Purchasing Managers' Survey data compiled by S&P Global on Monday.
The manufacturing Purchasing Managers' Index (PMI) fell to 45.8 in June from a 14-month high of 47.3 in May. The preliminary reading was 45.6.
A reading below 50.0 indicates contraction. The latest score suggests that the deterioration in manufacturing has accelerated significantly.
Factory production fell at its fastest pace so far in 2024 as demand conditions worsened more sharply, with producers reporting weaker sales to overseas customers and the biggest drop since February.
Manufacturers have cut back on purchases as production requirements have scaled back. The decline in purchasing levels was more pronounced than in May. Purchased inventory has continued to deplete with each passing month since the beginning of 2023.
Backlogs fell in June, extending the current downward trend to more than two years. Employment fell for the 13th consecutive month. Manufacturers reported that supplier delivery times shortened in June.
Input costs rose for the first time in 16 months in June, while prices of goods leaving factories continued to fall, albeit slightly.
Business confidence remained unchanged from a 27-month high recorded in May, and companies remained optimistic about next year.
Among the four largest economies, German manufacturers were again the worst performing, while France also reported a significant deterioration in business conditions, while Italy's manufacturing sector contracted at a slower pace and Spain reported slower growth.
German manufacturing suffered a fresh setback in June as the rate of contraction in output and new orders accelerated after a sharp easing in May. The manufacturing PMI came in at 43.5 in June, down from a four-month high of 45.4. The reading was slightly above the preliminary reading of 43.4.
French manufacturing production fell the most since January. The manufacturing PMI final reading for June was 45.4, down from 46.4 in May but above the provisional reading of 45.3.
Italy's manufacturing activity contracted again in June, its third consecutive month of decline, as weaker demand led companies to cut production. The June manufacturing PMI rose slightly to 45.7 from 45.6 the previous month.
Spain's manufacturing economy continued to grow, but the pace of growth slowed in June. The manufacturing PMI fell to 52.3 in June from 54.0 in May.
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Renju Jaya
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