Eurozone manufacturing activity posts biggest contraction in 3 years

By Tuba Ongun

ANKARA (AA) – Eurozone manufacturing activity fell in June at its sharpest pace in over three years amid surging borrowing costs, according to a flash survey data released on Friday.

The Hamburg Commercial Bank flash eurozone manufacturing purchasing managers’ index (PMI) plunged to a 37-month low of 43.6 in June from 44.8 in May, the survey by US-based financial services firm S&P Global revealed.

The PMI was below the 50 threshold mark for the seventh consecutive month.

Manufacturing output dropped at the fastest rate since last October, driven by an increasingly sharp downturn in new orders for goods, which fell to the greatest extent since last October.

Backlogs fell at the sharpest rate for three years in euro area manufacturing sector and employment levels were cut for the first time since January 2021.

Manufacturers greatly reduced their purchases of inputs in June.

Weakening demand led to rising discounting in manufacturing, resulting in average input prices declining for a fourth consecutive month and at the steepest rate since July 2009.