Eurozone: “PMI above expectations”

Eurozone manufacturing industry PMI data for July has been announced. The manufacturing industry purchasing managers index (PMI) in the Euro Zone decreased by 2.3 points from the 52.1 index value in July to 49.8 points, the lowest level in 25 months. PMI data shows growth above 50 points and contraction below 50 points.

The output of the euro area manufacturing sector appears to have fallen sharply. The outlook for manufacturing output is negative due to concerns over supply chains, the Russia-Ukraine war and the economic situation. On the other hand, the suppression of demand by inflation and the decrease in orders accelerated the decline. Cuts to energy imports from Russia could pose a further downside risk on energy prices and direct production. Both of these factors have the potential to put further pressure on future Eurozone growth.

In the last few months, concerns about the global economic outlook have intensified and forecasts of a possible recession around the world have become more common. As a result, many financial institutions have recently lowered their forecasts for global GDP growth. Despite below-average growth, high inflation will keep many central banks on track for steady rate hikes through the end of the year. A recession could potentially occur in the Eurozone in the coming months. Despite the decline in growth expectations, the European Central Bank (ECB) is expected to continue tightening its monetary policy in the coming months.

Kaynak: Tera Yatırım
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