| The euro area manufacturing sector recorded a broad stabilization of operating conditions at the start of the third quarter. Output growth was sustained, although the upturn was the softest since March, while new orders saw a fresh (albeit marginal) reduction amid a deterioration in export demand. Positively, factory job shedding cooled to its least pronounced in almost two years. As for prices, input costs were unchanged and this was practically true for output charges too. There was a slight easing in year-ahead growth expectations, although forecasts remained slightly above their long-term average. The HCOB Eurozone Manufacturing PMI edged up to a three-year high of 49.8 in July, from 49.5 in June. Posting only just below the 50.0 threshold, the latest figure indicated a near-stabilization of operating conditions across the eurozone goods-producing sector. The eurozone as a whole saw factory production levels rise in July, marking five successive monthly expansions. The increase slowed slightly from June, however, and was the softest since March. Meanwhile, eurozone manufacturers dampened their retrenchment efforts in the latest survey period. Both input purchasing and employment moved closer to stabilization during July, posting their slowest reductions in 37 and 23 months, respectively. July survey data pointed to a slight intensification of supply chain pressures as average input lead times lengthened for a second month in a row and to the greatest extent since November 2022. The eurozone manufacturing sector registered stable prices during July. Input costs were unchanged, following three months of declines, while prices charged saw virtually no movement. Looking ahead, eurozone goods producers remained optimistic of growth over the next 12 months. In fact, the overall level of optimism was just above its long-term average despite falling from June's 40-month high. Powered by Commodity Insights |