Manufacturing operating conditions in the Eurozone diminished for a fifth consecutive month in June, new data on Monday reveals.
The EUR/USD has dropped to the low 1.1300s.
The IHS Markit Eurozone Manufacturing PMI (Purchasing Managers’ Index) fell to a three-month low of 47.6 in June. This is down from the 47.7 recorded in May and is below the earlier flash reading of 47.8.
Operating conditions for consumer goods companies improved the most since January.
Operating conditions were mostly weak, latest country data shows. Germany remained the weakest-performing country, though its PMI did improve to a four-month high.
Austria, Spain, Ireland and Italy each recorded PMI readings below the 50.0 no-change mark and growth in the Netherlands was small.
France recorded its highest PMI for nine months and Greece remained the strongest-performing nation, even though its PMI was the lowest reading it has recorded for 19 months.
“Eurozone manufacturing remained stuck firmly in a steep downturn in June, continuing to contract at one of the steepest rates seen for over six years. The disappointing survey rounds off a second quarter in which the average PMI reading was the lowest since the opening months of 2013, consistent with the official measure of output falling at a quarterly rate of approximately 0.7% and acting as a major drag on GDP,” Chris Williamson, Chief Business Economist at IHS Markit, commented on the data.
“Deteriorating inflows of new work meanwhile meant manufacturers increasingly focused on keeping costs down, notably by cutting staff numbers and warehouse stocks,” Chris Williamson continued.
“The downturn is also increasingly feeding through to lower inflationary pressures, as producers and their suppliers compete on price to retain customers and generate sales. In stark contrast to the steep rise in producers’ costs and charges seen at the start of the year, raw material prices are now falling for the first time in three years and selling prices are barely rising.”
“The downturn is also showing no signs of any imminent end. The survey’s forward-looking indicators remained worryingly subdued in June, adding to concerns about the economy in the second half of the year.”
