The growth rate of the eurozone manufacturing sector continued to improve in June. This was highlighted by the final seasonally adjusted Eurozone Manufacturing PMI® rising for the second month running to reach 52.5, its highest reading since April 2014. The June final reading was in line with the earlier flash estimate.
The performance of the manufacturing sector also made progress during the second quarter as a whole, with the average readings for the headline PMI and the indices tracking both output and new orders all at their highest levels since Q2 2014. June saw the Netherlands rise to the top of the PMI growth league table, pushing Ireland into second position. Spain and Italy also continued to register solid expansions, albeit at slower rates than in the prior month.
Positive signs also came out of Germany, France and Austria. Although PMI readings for these nations were consistent with only modest growth, they were nonetheless improvements on May. For France this also represented a move back into expansion territory following a 13-month sequence of contraction.
The main negative from the latest survey was the deteriorating performance of the Greek manufacturing sector. The Greek PMI dropped to its second-lowest reading in the past two years, as output fell at the quickest pace since June 2013. New orders were also down sharply, as domestic conditions weakened and new export business shrank at the steepest pace in 28 months. Job losses were recorded for the third month running.
June data signalled the joint-fastest growth of eurozone manufacturing production in over a year, as the pace of increase in new orders matched May’s 13-month record. Companies benefitted from improved inflows of new work from both domestic and export clients.
The level of new export business rose again in June, extending the current sequence of unbroken expansion to two years. Germany, Italy, Spain, the Netherlands, Austria and Ireland all registered growth of new export orders, while France registered only a negligible decrease.
Jobs growth was registered in the eurozone manufacturing sector for the tenth consecutive month in June. Moreover, the rate of increase accelerated to its second-highest in almost four years, as companies responded to rising new order inflows and a moderate accumulation of backlogs of work. Employment rose in Germany, Italy, Spain, the Netherlands and Ireland.
Cost inflation remained solid in June, despite slowing from May’s three-year high, reflecting recent oil price increases and rising import costs resulting from the euro’s depreciation. Input price inflation accelerated in France, Italy, Spain, the Netherlands and Ireland, while costs increased in Austria for the first time since last September. Germany and Greece both reported sharp easings in their respective rates of cost inflation.
Meanwhile, average selling prices at eurozone manufacturers rose for the second time in the past three months. Output charges rose in Germany, Italy, Spain and the Netherlands, but fell in the other nations covered by the survey.