The downturn in the euro zone manufacturing sector eased for the first time in four months in May. Markit's Eurozone Manufacturing Purchasing Managers Index (PMI) was at a 15-month high of 48.3 in May, up from April's four-month low of 46.7 and above the earlier flash estimate of 47.8. The seasonally adjusted PMI indicated the slowest pace of contraction since February 2012. However, the Markit Final Eurozone Manufacturing PMI was below the neutral 50 points signalling a deterioration in business conditions since August 2011.
All of the national PMI indices signalled weaker rates of contraction in May. The German PMI signalled the slowest rate of contraction overall and moved close to the stabilisation level as output and new orders both rose for the first time in three months. The biggest mover was the Spanish PMI, which rose by one of its largest historical margins, reaching a two-year high. The downturns in France, Italy and Greece also eased, with the smallest decreases seen in 13, four and 23 months respectively.
The downtrends in manufacturing output and new export orders in the euro area both slowed over the month of May, with production falling at the slowest pace in the current 15-month sequence of contraction and with new orders declining at the weakest rate since June 2011.
Chris Williamson, chief economist at Markit, said, "Despite the final PMI coming in above the flash reading, the surveys still suggest that GDP is likely to have fallen 0.2 percent in the second quarter, extending the region's recession into a seventh successive quarter. However, the downturn is not getting any worse."