Eurozone manufacturing showed resilience in June, with initial concerns easing as revised data on Monday indicated a milder downturn than previously feared. The purchasing managers index (PMI) for the manufacturing sector was revised up to 45.8 last month, a slight increase from the initial estimate of 45.6 released earlier. PMIs for Germany, France, and Italy were also adjusted marginally higher for the month. Despite these adjustments, the overall PMI for the euro area remained below the critical 50-point threshold that signifies contraction, down from May's 14-month high of 47.3. The long-term average PMI stands at 51.6. Factory production across the region saw a notable decline, with the output PMI dropping to 46.1 from 49.3, reflecting worsening demand conditions. New orders also fell further below the 50-point mark, indicating ongoing challenges. Manufacturers responded by reducing purchasing quantities in June amid decreased production needs, while existing stocks continued to diminish. Cyrus de la Rubia, chief economist at HCOB, expressed cautious optimism despite the downturn, comparing it to previous false starts in the manufacturing sector. He noted that while PMIs deteriorated in most Eurozone countries in June, a global recovery in manufacturing, observed in countries like the United States, UK, and India, offers support. Moreover, businesses' optimism about future production remains robust, suggesting confidence in upcoming economic conditions despite current challenges. Attribution: Hamburg Commercial Bank (HCOB).
