- Manufacturing PMI (final) 45.8 vs. 45.6 prelim and 47.3 prior.
Key findings:
- HCOB Eurozone Manufacturing PMI at 45.8 (May: 47.3). 2-month low.
- HCOB Eurozone Manufacturing PMI Output Index at 46.1 (May: 49.3). 6-month low.
- Sharper decline in new orders and costs increase, but outlook remains upbeat.
Comment:
Commenting on the PMI data, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said: “Is this another bull trap for the manufacturing sector, similar to the false start at the beginning of 2023 when output briefly improved only to fall back again for a longer period? Indeed, the PMI indices for all Eurozone countries, except Italy, deteriorated in June. However, we are inclined to see this more as a temporary blip rather than a sign of a prolonged downturn. Manufacturing growth was seen in other parts of the world in June, such as the United States, UK, and India, according to their respective Flash PMI. This global recovery provides a supportive backdrop for Eurozone manufacturers. Additionally, optimism about future production remains as high as it was in May, indicating that businesses are still confident about the coming year."
“It's rather depressing that forward-looking new orders are falling at an accelerated pace. This decline comes after a record stretch of 25 consecutive months of falling demand, but a vague hope that things were improving in May when the respective index showed some increase. This means that any significant recovery will likely be postponed until at least the end of the summer or the beginning of fall."
“It may be a good sign that an increasing number of companies were able to pass on some of the increase in input costs to their clients. This suggests that there is some pricing power in the market, which typically re-emerges when conditions are starting to improve."
“Germany has failed to shake off its position as the worst performer among the eurozone countries tracked by the PMI survey. Austria is doing nearly as poorly, and manufacturers in France and Italy remain in recessionary territory as well. In contrast, the Netherlands, Spain, and Greece are seeing growth in their manufacturing sectors. We attribute Germany’s weak performance to its above-average exposure to the car industry, which is suffering on a global scale.”
