Source: Sharecast
The PMI, jointly published by S&P Global and Hamburg Commercial Bank (HCOB) showed a reading of 49.4 for last month, in line with initial estimates and up from 49.0 in April.
While still under the 50-point neutral mark which separates growth from contraction, this was the fifth straight improvement in the index and the highest reading since August 2022.
Manufacturing output grew for the third straight month, with the output PMI index unchanged at 51.5, while companies were reported to be less aggressive with layoffs, input purchasing and inventories.
Meanwhile, manufacturing confidence rose to its highest level since February 2022 with the demand for eurozone goods showing signs of stabilising after a sustained period of contraction.
Among member states, the PMI data showed improving conditions in Greece (PMI was unchanged at 53.2), a return to growth in Spain (50.5) and a 28-month high in France (albeit still marginally negative at 49.8).
Conditions in Germany still remain depressed with the PMI showing a reading of 48.3, though production in the country increased. However, it is thought that momentum will begin to build in the coming months thanks in part to the new government's expansionary fiscal policies.
“The upward trend in the headline PMI is still continuing, pointing towards a recovery that is progressing," said Cyrus de la Rubia, chief economist at HCOB.
"That is backed up by the rise in production we have seen since March. What is especially encouraging is that production has picked up across all four major eurozone economies, which really highlights how broad-based this recovery is."
De la Rubia said that lower interest rates and falling energy prices were also giving the sector "some breathing room", while US trade tariffs may have prompted US buyers to place orders early.
