PMI Europe Suggests Slow Economic Recovery

Sustained Supply Shortages, Energy Costs Hurt Eurozone Manufacturing

Manufacturing activity in the Eurozone continues to be subdued, according to the latest Purchasing Managers Index (PMI) survey.

The PMI, released by S&P Global, fell to 52.4 in July, down from 54.9 in June. This is the lowest reading since December 2020, and it indicates that manufacturing activity is growing at its slowest pace in over a year and a half.

The decline in the PMI is mainly due to sustained supply shortages and rising energy costs. The war in Ukraine has disrupted supply chains and pushed up the prices of raw materials, making it more difficult for manufacturers to produce goods.

The eurozone economy is also being hurt by the rising cost of energy. The price of natural gas has more than doubled in the past year, and this is putting a strain on businesses and consumers.

• The PMI survey is a monthly survey of purchasing managers in the manufacturing sector.
• The PMI is a leading indicator of economic activity.
• A PMI reading above 50 indicates that manufacturing activity is expanding.
• A PMI reading below 50 indicates that manufacturing activity is contracting.

The decline in the PMI is a worrying sign for the eurozone economy. It suggests that the economic recovery is slowing, and it could increase the risk of a recession.

The European Central Bank (ECB) is expected to raise interest rates in September in an effort to combat inflation. However, this could further slow the economic recovery.

The future of the eurozone economy is uncertain. The war in Ukraine and the rising cost of energy are creating significant challenges for businesses and consumers.