Eurozone PMI falls to 37-month low in July

Markit's Eurozone Manufacturing Purchasing Managers Index (PMI) fell to its lowest reading since mid-2009 in July this year to 44 points, down from 45.1 in June and showing little change from the earlier flash estimate of 44.1.
 
The PMI has now signalled a contraction for 12 consecutive months. Widespread weakness was seen across the currency region, with almost all of the national PMIs at sub-50.0 levels. Only Ireland bucked the trend, seeing improved business conditions as its PMI hit a 15-month high.
 
New export orders in the region in July fell at the fastest pace in eight months, with intra-eurozone trade particularly subdued. Only Ireland and the Netherlands reported increases in new exports. The German export machine remained firmly in reverse during July, recording the steepest drop in new orders of all countries and the fastest rate of decline since May 2009. Meanwhile, eurozone manufacturing output fell at the strongest rate since May 2009. By country, the strongest declines were registered in Greece, Spain and Germany respectively.
 
Chris Williamson, chief economist at Markit, said, "The eurozone manufacturing sector's woes intensified again in July. Output fell at the fastest rate since mid-2009, consistent with the official measure of production falling at a quarterly rate in excess of one percent. Manufacturing therefore looks to be on course to act as a major drag on economic growth in the third quarter, as the eurozone faces a deepening slide back into recession."