Interestingly, the last Markit survey’s responses on Eurozone manufacturing activity were due on June 23, the day of the “Brexit” vote for the United Kingdom to exit the European Union. In that survey, the Markit Eurozone Manufacturing PMI rose to a six-month high, with stronger data in most European markets, including Germany and the U.K. Suffice it to say, the surprise – at least for financial markets – decision for Britain to leave the European Union has shifted sentiment since then. In the latest survey, the Markit Flash Eurozone Manufacturing PMI fell to a two-month low, down from 52.8 in June to 51.9 to July, mainly on slowing new orders (down from 53.4 to 52.0). The composite measure, which includes the service sector, edged down from 53.1 to 52.9, its lowest level since January 2015 and off from 54.3 six months ago.
Digging a little deeper, manufacturing activity in the U.K. (down from 52.1 to 49.1) contracted in July for the second time this year on decreased demand and production, with its composite index (down from 52.4 to 47.7) declining at its fastest rate since April 2009. At the same time, Germany (down from 54.5 to 53.7) slowed a little for the month, but continued to expand modestly. In addition, French manufacturers (up from 48.1 to 48.5) remained in negative territory, contracting for the fifth consecutive month, albeit at a slower pace.
Meanwhile, the Markit Flash U.S. Manufacturing PMI jumped from 51.3 to 52.9, its highest level since October. Stronger growth in new orders (up from 52.4 to 54.2), output (up from 50.9 to 53.9) and employment (up from 52.0 to 53.4) helped to buoy July’s headline index, which has rebounded strongly from May’s 50.7 reading, its slowest pace of expansion since September 2009. Nonetheless, export growth (down from 52.5 to 52.4) decreased marginally but expanded modestly.
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