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Euro area factory PMI for July revised sharply higher

By Alexander Bueso

Date: Monday 03 Aug 2020

Euro area factory PMI for July revised sharply higher

(Sharecast News) - Factories in the single currency block whirred back to life last month, led by faster activity in Spain and Austria.
IHS Markit's manufacturing sector Purchasing Managers' Index for July was revised higher from a preliminary reading of 51.1 to 51.8 and a reading of 47.4 for June.

Nonetheless, the survey findings showed that companies were still operating below capacity, while backlogs of orders continued declining.

Most importantly, said IHS Markit, job losses remained greater than at any time since 2009.

So despite the "very positive" start to the third quarter, said IHS Markit's chief business economist, Chris Williamson, "The next few months numbers will therefore be allimportant in assessing whether the recent uplift in demand can be sustained, helping firms recover lost production and alleviating some of the need for further cost cutting going forward."

At the national level, the Spanish PMI came in highest, at 53.5, followed by a reading of 52.8 in Austria.

On the opposite side of the ledger, Greece and the Netherlands recorded the weakest readings, with their PMIs coming in at 48.6 and 47.9, respectively.

The latest did however show improved demand both at home and from overseas, with new export orders turning positive for the first time since September 2018.

Business confidence was also up, rising to its highest since January for the next 12 months.

Companies in Italy were the most confident and those in France and Greece the least.

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