Eurozone industrial production fell in June for the first time since the onset of the coronavirus pandemic as high prices and deteriorating economic prospects worried consumers, a survey by S&P Global revealed on Friday.
The Purchasing Managers’ Index (PMI) for the eurozone industry dropped by 2.5 points in June compared to May, sliding to 52.1 points, the lowest level since August 2020, S&P Global reported.
The index measuring production fell by two points to 49.3 points, the lowest level in two years. Values below 50 points signal a decline in activity.
– The eurozone industry changed its trend in June and began a downward trajectory, as production decreased for the first time in two years under the influence of an increasingly sharp decline in demand. Demand is now weakening, and companies report that customers are spending more cautiously due to rising prices and uncertain economic prospects – said Chief Business Economist Chris Williamson.
The new orders index fell even deeper below the 50-point threshold, to 45.2 points, the lowest level since May 2020.
Indicators signaling trends in the upcoming period paint a bleak picture, as inventories of raw materials and unsold products have increased due to unexpectedly modest production and sales. Companies have therefore turned to fulfilling old orders.
– It seems that the decline will deepen in the coming months – concludes Williamson.
