Eurozone financial exercise worsened in June to a five-month low, hit laborious by a fall in industrial manufacturing, a keenly watched survey confirmed on Friday.
The Eurozone entered a technical recession at first of the yr, in accordance with official figures revealed earlier this month.
But inflation stays properly above the European Central Bank’s goal of two p.c, which is able to preserve strain on the Frankfurt-based physique to maintain elevating rates of interest regardless of the stagnant financial system.
Data from the HCOB Flash Eurozone buying managers’ index (PMI) survey revealed by S&P Global fell to 50.3 in June from 52.8 in May. A determine above 50 signifies progress.
The knowledge demonstrated “renewed weakness in the economy after the brief growth revival recorded in the spring,” S&P Global mentioned.
It famous the primary fall in new business orders since January, slowing employment progress and pessimism over future manufacturing.
“After Eurozone GDP fell for the second time in a row in the first quarter, the probability has increased somewhat that the GDP change will again carry a negative sign in the current quarter, due in part to weak services activity in France,” mentioned Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.
France recorded the weakest efficiency within the Eurozone in June, with the “steepest” drop in exercise within the manufacturing and companies sectors since February 2021.
In Germany, the Eurozone’s greatest financial system, progress got here near a standstill, in stark distinction with expansions recorded within the three months to May.
Worries amongst companies within the single foreign money space are rising, S&P Global mentioned.
“June has seen a further escalation of concerns over demand growth, and in particular the impact of higher interest rates, and the resulting possibilities of recessions both in domestic markets and further afield,” it mentioned.
It was not all dangerous, as S&P Global pointed to a “marked cooling of inflationary pressures”.
But economists mentioned the PMI knowledge wouldn’t sway the ECB away from elevating charges.
“The sluggish economic picture combined with continued improving inflation would appear to be dovish for the ECB. However, none of this will provide a catalyst for the bank to change direction on rate hikes,” ING senior Eurozone economist Bert Colijn mentioned.
Source: www.dailysabah.com
