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- Eurozone: manufacturing economy continues to contract in May - IHS Markit
Eurozone: manufacturing economy continues to contract in May - IHS Markit
According to the report from IHS Markit, the eurozone’s manufacturing economy remained entrenched inside contraction territory during May.
After accounting for seasonal factors, Eurozone Manufacturing PMI® posted below the crucial 50.0 no-change mark for a fourth successive month, recording a level of 47.7 (unchanged from the earlier flash reading). That was slightly down on the previous month’s 47.9 and close to March’s near sixyear low.
According to market group data, weakness remained centred on the intermediate and investment goods sectors.
The latest downturn in new work inevitably continued to weigh on production, which was reported to be down in May for a fourth successive month. However, with the rate of contraction remaining modest, and slower than that of new work, firms were again able to make notable inroads into their backlogs.
There was further evidence of emerging slack in supply chains during May, as average lead times for the delivery of inputs shortened to the greatest degree since mid-2009.
On the price front, input cost inflation softened in May, falling to its lowest level since August 2016. Firms chose to pass on these higher operating expenses to clients as highlighted by a similarly modest increase in output charges.
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