Eurozone manufacturing continues to contract in May

By Muhammed Ali Gurtas

ANKARA (AA) - The eurozone’s manufacturing economy remained entrenched inside contraction territory in May, according to a London-based global data company on Monday.

IHS Markit reported that the Purchasing Managers’ Index (PMI) for the eurozone manufacturing sector stood at 47.7 points last month, down from April's 47.9 and close to March’s near six-year low.

"After accounting for seasonal factors, the PMI posted below the crucial 50.0, no-change mark for a fourth successive month," it said.

As a critical measurement to indicate the health of the manufacturing sector, the monthly PMI indices -- based on surveys and national data -- show a growth with a value above 50 points, a contraction with a level below 50 points, compared to the previous month.

The latest data revealed that weakness remained centered on the intermediate and investment goods sectors.

"In both instances, rates of deterioration were again marked and contrasted noticeably with the performance of the consumer goods category, where growth was sustained to a modest degree.

"The consumer goods sector has now registered continuous expansion for five-and-a-half years," it said.

IHS Markit noted that underperformance of the region’s manufacturing sector continued to be closely linked to deteriorating order books.

"Latest data showed an eighth successive monthly fall in new work received.

"Panelists reported falling demand both at home and abroad – as highlighted by another solid (albeit slower) fall in new export orders during May," it said.

The monthly report also showed that Germany continued to endure the sharpest deterioration in manufacturing operating conditions -- 44.3 points in May.

"Italy’s PMI [49.5] also remained below 50.0, albeit only slightly," it said. "Only marginal growth was seen in France [50.6] and Spain [50.2]."