Eurozone manufacturing showed signs of recovery in May, with output rising for the third consecutive month, according to the latest HCOB PMI data from S&P Global. The headline index increased slightly to 49.4 from 49.0 in April, the highest since August 2022, signalling a continued easing of the sector's downturn. New orders stabilised after a long period of decline, while export sales approached near-stability, reaching a 38-month high. Employment and purchasing activity continued to fall but at their slowest rates in months. Input costs decreased for the second month in a row, prompting firms to cut output prices for the first time since February. Business confidence hit its highest level since February 2022, boosted by improving production across major economies including Germany, France, Italy, and Spain. However, concerns remain over potential US tariff hikes on EU imports, which could threaten the fragile recovery. Chief Economist at Hamburg Commercial Bank Dr Cyrus de la Rubia highlighted the broad-based nature of the recovery and noted that lower energy prices and easing input costs are providing relief to manufacturers, supporting the European Central Bank's potential interest rate cuts. Attribution: Amwal Al Ghad English Subediting: M. S. Salama
