Financial News: Eurozone Manufacturing Sector Contraction Slows In June

Eurozone Manufacturing Sector Contraction Slows In June

07/01/2025 - 08:11:00 (RTTNews)

(RTTNews) - Eurozone manufacturing activity contracted at a slower pace in June as output showed a sustained expansion and total new work stabilized ending a 37-month period of decline, final survey data from S&P Global showed on Tuesday.

The HCOB manufacturing Purchasing Managers' Index posted 49.5 in June, up from 49.4 in May. This was the highest score since August 2022.

However, the score remained below the neutral 50.0 threshold, signaling contraction. The flash PMI score was 49.4.

The survey showed that total new work stabilized in June and companies expanded production for the fourth straight month. Order from export markets were unchanged in June, ending the continuous downturn seen since March 2022.

Hopes of a turnaround in demand conditions across both domestic and export markets contributed to another rise in expectations for the coming twelve months. However, companies reduced employment and purchasing activity.

Regarding prices, the survey showed that purchasing costs decreased for the third consecutive month, which led to another marginal reduction in average prices charged by euro area manufacturers.

There was a mixed picture across the national Manufacturing PMIs in June. While manufacturing activity strengthened in Spain, there were faster declines in Italy and France. German manufacturers also signaled a sustained downturn in June.

Germany's manufacturing activity continued to shrink but the pace of decline was the slowest since August 2022. The factory PMI hit 49.0 in June, in line with flash estimate, and up from 48.3 in May.

French manufacturers logged a renewed fall in production in June, in tandem with accelerated decline in new orders. The manufacturing PMI dropped to 48.1 from 49.8 a month ago. The flash reading was 47.8.

Italy's manufacturing PMI slid unexpectedly to 48.4 in June from 49.2 in May. The index was expected to rise to 49.5. The score signaled a moderate deterioration in operating conditions.

By contrast, Spain registered a strong growth in operating conditions in June. The PMI registered 51.4 in June compared to 50.5 in May. The index suggested the best score for the year so far.

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