Manufacturing output across the euro area continued to rise moderately in June, according to the latest S&P Global PMI survey.
Business confidence picked up again in June, indicating a further improvement after slumping to a 17-month low in April.
Cost pressures eased, but supply conditions remained a challenge.
Expectations for the year ahead remained slightly below their historical trend.
Business confidence picked up again in June, indicating a further improvement after slumping to a 17-month low in April. Expectations for the year ahead remained slightly below their historical trend, however.
Supply conditions remained a challenge, however, with the suppliers’ delivery times index still well below the level seen immediately prior to the outbreak of war in the Middle East.
Nevertheless, cost pressures eased in June and so too did the rate of output price inflation.
Business confidence rose to a four-month high.
The S&P Global eurozone manufacturing PMI ticked down from 51.6 in May to 51.4 in June, but still in expansion territory for a fifth consecutive month.
Euro area goods producers closed out the first half of the year with a sixth successive month of rising output volumes, and the pace of expansion accelerated from May’s four-month low.
After stagnating in May, the survey data signalled a rise in new orders received by eurozone manufacturers. The increase was only marginal, however.
Export demand remained a drag, having decreased for a second month in succession.
The volume of raw materials and semi-finished goods purchased by eurozone manufacturing firms declined in June, ending a three-month spell of growth.
Instead, inputs to production were taken directly from stock, as evidenced by a monthly contraction in pre-production inventories. The rate of depletion quickened and was the sharpest since January.
The use of pre-purchased materials allowed eurozone manufacturers to lessen the operational impact of supply-chain disruption.
June signalled that vendor capacity remained stretched. There were some signs of alleviating pressures as the respective sub-index rose to a three-month high. It did, however, remain well below the level seen prior to the outbreak of the Middle East war.
The extent to which jobs fell was moderate and slower than in May.
The rate of input cost inflation, albeit still elevated, declined in June and was its softest since March.
As for their own price-setting, eurozone manufacturers were less aggressive. The rate of output charge inflation eased to a three-month low.
Fibre2Fashion News Desk (DS)
