Euro Zone Manufacturing on the Brink of Stabilization
Euro zone manufacturing downturn eased in May, nearly achieving stabilization with production rising for the third month supported by demand nearing balance. The PMI rose to 49.4. Greece led with PMI at 53.2, and Spain returned to expansion. Manufacturers' confidence rebounded despite concerns about U.S. tariffs.
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In May, the downturn in euro zone manufacturing showed signs of easing, nearing stabilization as production increased for the third consecutive month. Demand neared a balance, according to the HCOB Eurozone Manufacturing PMI which rose to 49.4 from April's 49.0.
Chief economist at Hamburg Commercial Bank, Cyrus de la Rubia, noted that the headline PMI's upward trend indicates an ongoing recovery. While new and export orders improved, companies reduced job cuts. Greece led with a PMI of 53.2, while Spain saw expansion at 50.5.
The region's manufacturing confidence rose to its highest since 2022, despite concerns over potential U.S. tariffs. Input costs decreased for the second month, allowing factories to reduce prices, potentially supporting anticipated ECB interest rate cuts.
(With inputs from agencies.)
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