Eurozone factory activity slows in July as inventories build - PMI

Eurozone manufacturing activity contracted in July as weak demand saw inventories building, a survey revealed on Monday.

The S&P Global final manufacturing Purchasing Managers' Index (PMI) fell to 49.8 in July from 52.1 in June and just ahead of a preliminary reading of 49.6.

It was the first time below the 50 mark that separates growth from contraction since June 2020.

"Euro zone manufacturing is sinking into an increasingly steep downturn, adding to the region's recession risks. New orders are already falling at a pace which, excluding pandemic lockdown months, is the sharpest since the debt crisis in 2012, with worse likely to come," said S&P Global chief business economist Chris Williamson.

"Lower than anticipated sales, reflected in accelerating rates of decline of new orders and exports, have led to the largest rise in unsold stocks of finished goods ever recorded by the survey."

The new orders index fell to a more-than-two-year low of 42.6 from 45.2.

S&P Global said production was falling in all countries surveyed other than the Netherlands and that the rate of decline was of particular worry in Germany, France and Italy - the bloc's three biggest economies.

Reporting by Frank Prenesti at Sharecast.com