While the index remains in negative territory, it represents the smallest drop in more than a year. Spain's economic situation is improving, while Germany and France continue to show weakness.
advertisementS&P Global said on Monday that Hamburg Commercial Bank's (HCOB) final euro zone manufacturing PMI rose to 47.3 for May.
That was up from 45.7 in April and just below the preliminary estimate of 47.4.
The PMI figure measures the health of the economy based on five indicators: new orders, production, employment, supplier delivery times and purchased inventory.
A number above 50 indicates expansion, while a number below 50 indicates contraction.
Manufacturing PMI production hits 14-month high
The Manufacturing PMI Output Index is another component of the broader Manufacturing PMI and looks at the sector's output.
The index rose sharply to a 14-month high of 49.3 in May, below the provisional reading of 49.6 but up from 47.3 in April.
“Manufacturing has shown tentative signs of recovery in the euro area,” said Boudewijn Dre Doncks, a partner at McKinsey & Company.
“Export orders are improving in Germany and domestic demand appears to be recovering in France. However, weaknesses remain. For example, factory employment continues to fall in Germany due to spare capacity, and France reports weak exports.”
The German and French PMIs were 45.4 and 46.4 respectively last month, slowing their monthly declines but still below 50.
Italy and Austria also saw contractions.
Spain, the Netherlands and Greece perform well
Economic expansion accelerated in Spain and the Netherlands, reaching 54 and 52.5 respectively.
Greece topped the list with a PMI of 54.9, but the figure was the country's lowest in four months.
Looking at specific indicators within the broader PMI figures, new orders and production still fell month-on-month, but the rate of decline slowed.
When it came to the delivery of raw materials and other items needed for production, panelists reported further improvements in delivery times.
Employment fell at a steady but slow monthly rate, and manufacturers also reduced inventories of raw materials and parts.
Business sentiment improved during the month.
