Eurozone manufacturing production fell last month for the first time since August 2020 as the Covid pandemic took hold, with rising inflation putting the brakes on consumer spending, according to a survey published on Friday.
The S&P Global final manufacturing Purchasing Managers’ Index (PMI) fell to 52.1 in June from May’s 54.6, but just ahead of a preliminary reading of 52.0.
An ouput index fell to a two-year low of 49.3 compared with 51.3 in May. A number below 50 indicates contraction.
“Euro zone manufacturing has moved into decline in June, with production dropping for the first time for two years amid a steepening downturn in demand,” said S&P Global chief business economist Chris Williamson.
“Demand is now weakening as firms report customers to be growing more cautious in relation to spending due to rising prices and the uncertain economic outlook.”
The new orders index fell to 45.2 from 48.7, its lowest level since May 2020. Inventories of raw materials and unsold stock have risen due to lower-than-expected production and sales volumes.
“The downturn looks set to gain momentum in coming months,” Williamson said.
Reporting by Frank Prenesti at Sharecast.com