Markit's Eurozone Manufacturing Purchasing Managers Index (PMI) posted 51.8 points in July, up from June’s 47.4 percent and increasing compared to the earlier flash estimate at 51.1 points. As output and demand continued to recover in line with the further easing of coronavirus-related restrictions on activity, the euro zone manufacturing economy recorded its first growth in a year and a half during July.
The overall improvement in operating conditions signaled by the PMI was the first occurrence recorded by the survey since February 2019. Consumer goods was the best performing segment, registering its strongest expansion for over a year-and-a-half. According to Markit, manufacturers continued focusing on utilizing existing stocks in production in July and made the sharpest cut to their purchasing activity in six months.
“Euro zone factories reported a very positive start to the third quarter, with production growing at the fastest rate for over two years, fueled by an encouraging surge in demand. Growth of new orders in fact outpaced production, hinting strongly that August should see further output gains. The next few months’ numbers will therefore be all important in assessing whether the recent uplift in demand can be sustained, helping firms recover lost production and alleviating some of the need for further cost-cutting going forward,” said Chris Williamson, chief business economist at IHS Markit.