Eurozone Factory Activity Decline Deepens in June

• Manufacturing activity across the eurozone took a turn for the worse last month as demand fell faster despite factories cutting their prices, a survey showed.
• HCOB's final euro zone manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, fell to 45.8 in June from May's 47.3, just ahead of a 45.6 preliminary estimate. It has been below the 50-mark separating growth from contraction for two years.
• An index measuring output, which feeds into a composite PMI due on Wednesday and 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 46.0 flash estimate.

• "The PMI indices for all eurozone countries, except Italy, deteriorated in June. However, we are inclined to see this more as a temporary blip rather than a sign of a prolonged downturn," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.
• "Manufacturing growth was seen in other parts of the world in June, such as the United States, Britain, and India, according to their respective flash PMI. This global recovery provides a supportive backdrop for eurozone manufacturers." The new orders index dropped to 44.4 from 47.3. That drop came despite factories cutting prices charged for a fourteenth month, although less steeply than in previous months.
• "It's rather depressing that forward-looking new orders are falling at an accelerated pace," de la Rubia added. "This decline comes after a record stretch of 25 consecutive months of falling demand, but a vague hope that things were improving in May when the respective index showed some increase."

(Source: Reuters)