Markit's Eurozone Manufacturing Purchasing Managers Index (PMI) posted 55.1 points in July this year, up from June’s 54.9 points and remaining unchanged when compared to the earlier flash estimate of 55.1 points. The euro zone manufacturing growth remained subdued in July.
The rate of expansion posted the second-weakest levels since November 2016 although it improved slightly. In recent months, the subdued trend in the production growth shows that the rate of increase in new orders decelerated at the same time.
“A marginal uptick in the PMI provides little cause for cheer given it is the second-weakest number for more than one-and-a-half years. The past two months have seen the most subdued spell of factory output growth since late 2016. Worse may be to come. Even this reduced rate of output growth continued to outpace order book growth, resulting in the smallest rise in order book backlogs for two years. The clear implication is that manufacturers may have to adjust production down in the coming months unless demand revives,” stated Chris Williamson, chief business economist at IHS Markit. “The survey responses indicate that the slowdown likely reflects worries about trade wars, tariffs and rising prices, as well as general uncertainty about the economic outlook. Optimism about the future remained at one of the lowest levels seen over the past two years.” he added.