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Purchasing Managers Index: Europe: Difference between revisions
Purchasing Managers Index: Europe (view source)
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* July survey data revealed a renewed reduction in new business intakes at service providers, marking the first contraction in demand for eurozone services since the end of last year. The decline, albeit only modest, was the quickest for eight months. Orders received from export markets also slumped further, July data showed. | * July survey data revealed a renewed reduction in new business intakes at service providers, marking the first contraction in demand for eurozone services since the end of last year. The decline, albeit only modest, was the quickest for eight months. Orders received from export markets also slumped further, July data showed. | ||
* The fall in new business led firms to turn their focus to their backlogs of work. Volumes of outstanding business fell for the first time since January. Employment growth was sustained nevertheless, continuing the current sequence of job creation that began two-and-a-half years ago. That said, the rise in staffing levels was the slowest in five months. | * The fall in new business led firms to turn their focus to their backlogs of work. Volumes of outstanding business fell for the first time since January. Employment growth was sustained nevertheless, continuing the current sequence of job creation that began two-and-a-half years ago. That said, the rise in staffing levels was the slowest in five months. | ||
=== August 2023 === | |||
==== Manufacturing ==== | |||
The eurozone manufacturing sector remained under intense pressure midway through the third quarter, according to the latest HCOB PMI® survey data, as plummeting new orders and rapidly depleting backlogs of work put a considerable squeeze on production lines across the single currency union. Factory employment levels continued to fall, albeit marginally, while purchasing activity was slashed once again as companies maintained their efforts to run down stocks.<ref>https://www.pmi.spglobal.com/Public/Home/PressRelease/5631eb23a4fa49a08a7f1dc82004436e</ref> | |||
There was an improvement in optimism during August, despite the rapid and broad deterioration in sector conditions seen on the month. Overall, growth expectations strengthened to a three-month high, but remained well below the long-run average. Country-level data showed that positive sentiment was strongest in Ireland and Italy, followed by Greece, offsetting pessimistic outlooks at firms in Germany, France and Austria. | |||
“These numbers aren't as terrible as they might look at first glance. Obviously, the overall PMI manufacturing index, sitting at 43.5, suggests pretty noticeable weakness in this sector. However, all of the twelve subindices have moved upwards or remained practically unchanged, showing that the downward trend from the past few months is starting to lose steam across the board. Businesses are still holding back from making big staff cuts, even with a substantial drop in output over five months. This does not bode well for productivity or output per head, but provides some stability for the economy as a whole as people do not lose their income. Looking at the PMI price indices, companies were able to keep part of the reductions of input costs for themselves since spring of this year, thereby increasing their profit margins. However, the experience of 2020 and 2021 shows, that on the way up this development tends to reverse and margins suffer. The driver of the downturn has been the destocking cycle. There are tentative signs, however, that this process is nearing its end as companies took their foot off the gas when it came to reducing the stock of purchases in August. | |||
* HCOB Eurozone Manufacturing PMI at 43.5 (Jul: 42.7). 3-month high | |||
* HCOB Eurozone Manufacturing PMI Output Index at 43.4 (Jul: 42.7). 2-month high | |||
* HCOB Eurozone New Orders Index falls to 39.0, prompting firms to continue slashing their charges | |||
== References == | == References == | ||