Manufacturing activity in Europe fell last month, but Asian factories remained strong, giving policymakers comfort that the region can weather the impact of weakening Chinese demand, polls showed.
HCOB’s final eurozone manufacturing PMI, calculated by S&P Global, decreased to 45.8 in June from 47.3 in May. For the past two years, it has been below the 50-point level that separates growth and contraction.
Manufacturing growth in Britain fell in June from a 22-month high in May as continued disruptions to shipping in the Red Sea led to weaker demand from international clients.
A eurozone index measuring output, which feeds into a composite PMI due on Wednesday that is seen as a good gauge of economic health, sank from May’s 49.3 to a six-month low of 46.1, albeit just ahead of the 46 flash estimate.
The currency union’s new orders index fell to 44.4 from 47.3, despite factories decreasing prices for the fifteenth consecutive month.
China’s Caixin/S&P Global Manufacturing PMI increased to 51.8 in June from 51.7. It was the fastest pace in more than three years, outperforming market expectations of 51.2.
The private-sector reading came after official PMI data showed that China’s manufacturing activity decreased for the second consecutive month in June, while services activity fell to a five-month low.
The surveys show how Chinese enterprises are increasing output despite sluggish domestic demand, which Beijing has failed to reverse with a bailout plan for the struggling real estate sector.
