“Eurozone manufacturing remained stuck firmly in a
steep downturn in June, continuing to contract at
one of the steepest rates seen for over six years.
The disappointing survey rounds off a second
quarter in which the average PMI reading was the
lowest since the opening months of 2013,
consistent with the official measure of output falling
at a quarterly rate of approximately 0.7% and acting
as a major drag on GDP.
“Deteriorating inflows of new work meanwhile
meant manufacturers increasingly focused on
keeping costs down, notably by cutting staff
numbers and warehouse stocks.
“The downturn is also increasingly feeding through
to lower inflationary pressures, as producers and
their suppliers compete on price to retain customers
and generate sales. In stark contrast to the steep
rise in producers’ costs and charges seen at the
start of the year, raw material prices are now falling
for the first time in three years and selling prices are barely rising.
“The downturn is also showing no signs of any
imminent end. The survey’s forward-looking
indicators remained worryingly subdued in June,
adding to concerns about the economy in the
second half of the year.”