Eurozone manufacturing sector continues to suffer from the war, while UK and US show more resilience – PMI

Eurozone manufacturing sector continued to suffer from Iran/US war economic shock, which hurt demand for goods, while costs of raw materials rose at the fastest rate in four years, adding to growing inflation concerns.

Also, the reports released on Monday pointed to raising worries about energy and commodities supplies, particularly in the zone of conflict.

Eurozone May Manufacturing PMI came at 51.6, below 52.2 previous month, German PMI was 50.1 in May compared to 51.4 in April, with negative German retail sales data (May -0.3% vs 2.7% in April) further darken the picture.

Although all reports showed May numbers above 50 threshold (which divides growth from contraction) the latest data warn that the sector is showing signs of struggling under the weight of rising prices and supply disruptions coming from the war in the Middle East.

On the other hand, Manufacturing sectors in UK and the US showed more resilience (UK May Manufacturing PMI was 53.9 up from 53.7 previous month and US Manufacturing PMI came at 54.0 in May, the highest in four years, compared to 52.7 in April).

Economists remain concerned about the sector’s condition and particularly about depth of negative impact in case of prolonged crisis, as both sides in the conflict still stay away from any workable peace agreement, while the recent escalations (although limited and short-lasting) continue to fuel fears and continue to darken the outlook.