Markit's Eurozone Manufacturing Purchasing Managers Index (PMI) posted a six-month-high of 52.8 points in June this year, up from May’s 51.5 points and rising compared to the earlier flash estimate of 52.6 points.
The recovery in the euro zone manufacturing sector gathered momentum in June. Growth of both production and new orders accelerated to the fastest in the year so far, taking the respective rates of expansion during the second quarter as a whole a tick above those achieved in the first quarter.
Euro zone manufacturing output has now increased continuously for three years. The latest expansion was underpinned by rising levels of new business from both domestic and export markets.
The improved performance of the euro zone manufacturing sector also tested capacity at suppliers. Higher output led to the steepest increase in purchasing activity for seven months, which in turn led to the sharpest lengthening of vendor lead times since the turn of the year.
“Euro area manufacturers enjoyed their strongest growth so far this year in June. An upturn in the rate of production growth signals factory output is expanding at a near-two percent annual pace, which should help to drive further modest economic growth in the second quarter. New orders and exports* also rose at faster rates, prompting a welcome upturn in hiring,” stated Chris Williamson, chief economist at Markit. “Given the uncertainty caused by the prospect of Brexit, it seems likely that business and consumer spending will be adversely affected across the euro area in the short term at least, pulling growth down in the coming months,” he added.