Economic Buzz: Eurozone manufacturing sees marginal expansion of production volumes in June

At 49.5 in June, up fractionally from 49.4 in May, the HCOB Eurozone Manufacturing PMI, a measure of the overall health of eurozone factories compiled by S&P Global, reached its highest level since August 2022. Although still below the neutral 50.0 threshold, the latest reading signalled only a marginal downturn in manufacturing conditions.

Reduced staffing numbers and lower stocks of purchases were negative influences on the headline PMI in June, while rising production had a positive impact.

June data highlighted a sustained expansion of output levels across the euro area manufacturing sector, although there was a slight loss of momentum since May.

Encouragingly, total new work stabilised during the latest survey period, thereby ending a 37-month period of decline. Sales made to export customers were also unchanged over the month, which halted the continuous downturn seen since March 2022.

Looking ahead, hopes of a turnaround in demand conditions across both domestic and export markets contributed to another improvement in business activity expectations for the next 12 months, but this did not prevent further cutbacks to employment and purchasing activity.

Production volumes across the Euro area manufacturing sector increased for the fourth successive month in June. Despite a rise in output and an improved trend for incoming new work, the latest survey indicated a further modest decline in staffing numbers.

Suppliers? delivery times worsened for the first time since January, despite subdued demand for manufacturing items.

Finally, business optimism continued to recover from April?s recent dip. Confidence levels regarding prospects for output growth over the next 12 months were the highest for more than three years in June and comfortably above the long-run series average.

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