Eurozone May final manufacturing PMI 54.6 vs 54.4 prelim

Although the revised estimate is higher, it is still a 18-month low reading as inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term pressures continue to take a toll on manufacturing activity in the region. Of note, manufacturing new orders fell for the first time since June 2020 and output growth only picked up a little from the recent low in April. Meanwhile, business confidence was among the lowest seen over the past two years amid sustained concerns surrounding the outlook for prices, supply chains and demand.

A look of manufacturing activity across the region:

S&P Global notes that:

“Euro area manufacturers continue to struggle against the headwinds of supply shortages, elevated inflationary pressures and weakening demand amid rising uncertainty about the economic outlook. However, the manufacturing sector’s deteriorating health has also been exacerbated by demand shifting to services, as consumers boost their spending on activities such as tourism and recreation.

“The survey’s output gauge is indicative of official manufacturing production falling slightly so far in the second quarter, and forward-looking indicators such as the orders-to-inventory ratio suggest the rate of decline will accelerate in coming months, absent a sudden revival of demand for goods. The eurozone economy therefore looks increasingly, and uncomfortably, dependent on the service sector to sustain growth in the coming months.

“A major driver of the first drop in new orders for almost two years was the ongoing supply crunch and accompanying price pressures, with producers of many goods and raw materials raising their prices yet again alongside a recent surge in energy prices. Spending power has hence been hit hard, and often consumers in particular have shown an eagerness to move spending from goods to services, taking advantage of looser pandemic travel restrictions.

“However, there is also an undercurrent of growing uncertainty about the economic outlook, linked to Russia’s invasion of Ukraine, persistent inflationary pressures and supply disruptions, that is in turn driving increased risk aversion and caution among customers, which points to deeper underlying downside risks to the economic outlook.”