Eurozone manufacturing approaches a turning point! July PMI rises to 49.8, reaching a three-year high.

A survey shows that the HCOB Eurozone Manufacturing PMI compiled by S&P Global rose from 49.5 in June to 49.8 in July, reaching the highest level since July 2022. The data is in line with the preliminary figure, just one step away from the 50 threshold. Despite a decline in new orders and a slowdown in output growth, manufacturing activity in the Eurozone contracted at the slowest pace in three years in July, gradually approaching stabilization. Manufacturing output continued to grow for the fifth consecutive month but at a slower pace, with the output index falling from 50.8 to 50.6, hitting a four-month low. Cyrus Delarubia, Chief Economist at Hamburg Commercial Bank, stated, "Eurozone manufacturing is cautiously regaining momentum. With the EU reaching a new trade framework with the US, uncertainty should decrease, and various signs indicate that the upward trend will continue in the coming months." The US reached a framework trade agreement with the EU on Sunday, imposing a 15% import tariff on most EU goods. Germany, the largest economy in Europe, saw its manufacturing PMI rise to a 35-month high of 49.1, but remains in contraction territory. France and Austria performed the worst, with readings of 48.2 each. Among Eurozone countries, Ireland led with a PMI of 53.2, despite it being a two-month low. The Netherlands and Spain recorded 51.9 each, reaching 14-month and seven-month highs respectively. Greece maintained growth at 51.7. New orders saw a slight decline, while export sales dragged growth again after a brief stabilization in June. Price pressures in July disappeared, input costs remained stable after three consecutive months of decline, and factory prices showed almost no fluctuation. The European Central Bank kept interest rates unchanged last week and made a slightly optimistic assessment of the Eurozone economy. In July, business confidence in future output fell from a 40-month high in June but remained above the long-term average, indicating that manufacturers have cautious optimism for the coming year.