Euro area manufacturing activity contracts further in June

By Tuba Ongun

The downturn in the euro area manufacturing sector deepened in June as a contraction in output accelerated at the strongest pace in the year to date, according to a report released on Monday.

The HCOB Eurozone Manufacturing purchasing managers index (PMI) fell to its lowest level in six months at 45.8 in June, from May’s 14-month high of 47.3.

New orders, purchasing activity, and employment all dropped at faster rates in June.

On the price front, input costs grew for the first time since February 2023, forcing eurozone factories to reduce discounts.

Underlining that except for Italy, deteriorations were stronger in June than the prior month, Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said: "However, we are inclined to see this more as a temporary blip rather than a sign of a prolonged downturn."

Rubia stressed that optimism about future production remained as high as it was in May, signaling that businesses are still confident about the coming year.