Eurozone Manufacturing Sector Contracts Further in June as Demand Slumps

The eurozone’s manufacturing sector experienced a deeper contraction in June, as demand plummeted despite factories continuing to lower prices, according to a recent survey.

HCOB’s final eurozone manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, dropped to 45.8 in June from 47.3 in May, slightly exceeding the preliminary estimate of 45.6. This marks the second consecutive year that the index has remained below the 50 mark, indicating a prolonged period of contraction.

The output index, a key indicator of economic health, also declined significantly, reaching a six-month low of 46.1. This decline came despite factories cutting prices for the fourteenth consecutive month, although the rate of price reduction slowed compared to previous months.

The new orders index experienced a sharp drop to 44.4 from 47.3, signaling a rapid deterioration in demand. This decline in new orders is particularly concerning, as it suggests that the manufacturing sector’s struggles may persist in the coming months.

Overall, the survey paints a bleak picture of the eurozone’s manufacturing sector, with falling demand and persistent contraction raising concerns about the region’s economic outlook.