July saw the Eurozone Manufacturing PMI hold steady at June’s seven-month low of 51.8, as the ongoing expansions in Germany and outside of the big-two economies were partly offset by a deeper downturn at French manufacturers.
The final seasonally adjusted Markit Eurozone Manufacturing PMI® has nonetheless signalled an improvement in operating conditions for 13 successive months. Ireland registered the sharpest rate of expansion in July followed by Spain, where the rate of growth stayed close to June’s seven year record. The Netherlands saw a modest acceleration in its rate of improvement, as did Germany and Austria, and the upturn in Italy continued despite the pace of expansion easing to an eight-month low. In contrast, France and Greece reported deeper contractions, the sharpest for seven and nine months respectively. The performance disparity between Germany and France also widened, with the gap between the German and French PMI readings the greatest since February.
Eurozone manufacturers reported further growth of output, new orders and new exports. However, the rates of expansion all remained weaker than the highs seen at the start of the year.
The expansion in manufacturing production was the slowest since September 2013. Weaker output growth was registered in both the capital and consumer goods industries, whereas intermediate goods producers reported a modest acceleration.
The slower increase in output, combined with the relatively subdued trend in new order inflows, filtered through to the labour market. Staffing levels declined for first time in seven months, albeit only marginally, with losses reported in Germany, France, Austria and Greece. Payroll numbers rose in Italy, Spain, the Netherlands and Ireland, although none of the nations covered by the survey reported faster job creation in July.
Average selling prices were broadly unchanged in July. Higher charges were seen in Germany, Italy, Spain, Ireland and the Netherlands, but these were offset by price discounting in France, Austria and Greece. The reduction signalled in Greece was especially sharp.
By sector, output prices were lowered in the eurozone capital and intermediate goods industries, but raised at consumer goods producers. July saw average purchase prices increase for the second straight month and to the greatest extent during the year-to-date. However, the rate of inflation remained subdued compared to the historical standards of the survey.
Almost all of the nations covered reported higher input costs in July, the sole exception being Germany (which saw purchase prices fall for the sixth month running). The steepest increases were registered in Italy, Spain and France.