“The widespread belief that the recovery in the Eurozone would significantly accelerate in the second half of the year has not materialised. At the beginning of the year, it seemed the sector would recover from the downturn, but doubts that emerged in June have been exacerbated by a further decline in July,” comments Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank.
The Eurozone manufacturing PMI remained unchanged in July relative to June, at 45.8 points, well below the neutral 50-point level.
A decrease in new orders has led to accelerated declines in production and increased job cuts. As a result of the decline in orders, manufacturing companies have also reduced their level of purchases of raw materials and semi-finished products. Another worrying sign is the fastest rise in output prices for a year and a half.
The dire condition of the industry in Germany is particularly worrying. The PMI index for Germany’s manufacturing sector has been below 50 points for 25 months. The July PMI index reading of 43.2 points was 0.3 points lower than in June. Not only is it well below the 50-point threshold, but it is also below the 44 point level, which indicates a contraction in industrial production.
The signals coming from Poland are completely different from those in the Eurozone – the PMI index for Poland has recorded a significant jump, from 45 points in June to 47.3 points in July. However, the positive signal is unable to change the overall negative reality. Poland’s industrial sector has contracted for twenty-seven consecutive months, the longest streak since the survey began in 1998. New orders, production, exports, purchases, and employment continued to decline.
Source: trans.info