Factory activity in the Eurozone contracted faster than initially anticipated in June, as continued tighter monetary policy by the European Central Bank strained finances, a survey showed on Monday.
In June, S&P Global reported that the final HCOB manufacturing Purchasing Managers’ Index (PMI) fell to 43.4 from 44.8 in May. This was the lowest reading since the Covid the pandemic’s onset. The preliminary figure was 43.6.
The decline showed that factory activity in all of the four largest eurozone economies contracted last month.
The European Central Bank (ECB) has raised key interest rates by 400 basis points so far, with another 25 projected to be added this month in an effort to bring inflation back to its 2% target. This has resulted in an unfavorable effect on the purchasing power of households and businesses who are already in debt.