Eurozone Manufacturing Activity Moves Closer To Stagnation

(RTTNews) - The euro area manufacturing activity registered a broad stabilization in July as output continued to increase despite a fresh fall in new orders, purchasing managers' survey compiled by S&P Global showed on Friday.

The HCOB final manufacturing Purchasing Managers' Index rose to a three-year high of 49.8 in July from 49.5 in June. The score matched the flash estimate.

That said, the score suggested a near-stabilization of operating conditions across the manufacturing sector.

"Manufacturing in the eurozone is cautiously regaining momentum," Hamburg Commercial Bank Chief Economist Cyrus de la Rubia said.

"With the newly agreed trade framework between the EU and the U.S., uncertainty should decline, and the signs point to a continued upward trend in the coming months," de la Rubia added.

Among member nations, PMI readings improved in Germany and France but both continued to show contraction. Meanwhile, there was a pick-up in momentum in Spain and there was near stabilization of operating conditions in Italy.

Data showed that the upturn in German manufacturing output lost momentum in July due to slower increases in new orders and export sales.

Although the factory PMI rose to a 35-month high in July, the score signaled contraction. The factory PMI edged up to 49.1 from 49.0 in June. The flash score was 49.2.

France's manufacturing activity contracted with a rapid fall in new orders and production. The manufacturing PMI registered 48.2 in July, which was little changed from June's 48.1 and down from flash estimate of 48.4.

On the other hand, operating conditions in Spain's manufacturing sector continued to strengthen in July. The factory PMI rose to 51.9 from 51.4 in June.

In Italy, there were signs that the manufacturing downturn subsided in July. The HCOB factory PMI climbed to 49.8 from 48.4 in the previous month.