Eurozone manufacturing PMI edges lower in July

Markit’s final eurozone manufacturing purchasing managers’ index nudged down to 52.0 in July from 52.8 in June.

Still, the reading came in above the flash estimate of 51.9 and marked the 37th consecutive month of expansion.

The drop was driven by a softer positive contribution from new order growth. Incoming new business rose at a weaker pace than in June and to a lesser extent than the average for the year-to-date.

Meanwhile, the rate of job creation also ticked lower, but remained among the fastest registed in the last five years.

Chris Williamson, chief economist at Markit, said: “Although signalling an easing in the pace of expansion in July, the PMI points to steady manufacturing growth. The problem is that growth is looking increasingly lop-sided, which will worry policymakers and add to calls for further stimulus from the ECB.

“The surveys suggest that euro area factory output is expanding at a near-2% annual pace, which has encouraged firms to take on extra staff at the fastest rate for five years in recent months. Deflationary pressures are also easing, with costs showing the first rise for a year and selling prices stabilising.”

Pantheon Macroeconomics said the data was decent, but weakness in the periphery is intensifying.

“The eurozone manufacturing sector continues to do admirably well in the face of weakness in global industrial production,” it said.