Eurozone industrial activity falls at worst rate since 2020

The Purchasing Managers’ Index (PMI) for the eurozone manufacturing sector fell to 49.8 points in July, down from 52.1 in June, registering a reading below 50 points for the first time since June 2020.

Economists polled by Reuters had expected the July manufacturing PMI to come in at 49.6 in July.

The Purchasing Managers’ Index in the industrial sector provides an overview of the state of the economy in the manufacturing and service sectors and expresses operating and labor conditions in the non-oil private sector, and a reading above 50 indicates expansion. To get a reading of this indicator, purchasing managers determine the level of some elements of this sector, including employment, production, new orders, resource allocation and inventories.

This decrease increases the risk of recession that the region faces due to the impact of the interruption of the energy supply.

On the other hand, unemployment in the euro area remained at its lowest level in June at 6.6 percent of the total population, according to the European Union’s statistics agency.