The HCOB Eurozone Manufacturing PMI (Purchasing Managers’ Index) for May 2025, as reported by S&P Global, came in at 49.4, showing a slight improvement from 49.0 in April, reports Euro News.
Rising Business Confidence
Business confidence in the Eurozone reached its highest level in over three years in May, indicating a strengthening recovery.
Dr. Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, commented in the May Eurozone PMI report: “The upward trend in the headline PMI is still continuing, pointing towards a recovery that is progressing. That is backed up by the rise in production we have seen since March.” He further highlighted the broad-based nature of this recovery, noting that “production has picked up across all four major eurozone economies.” Based on historical patterns, with output rising for three consecutive months, there’s a 72% chance of another increase in the coming month.
However, Dr. de la Rubia also identified a significant risk to this positive outlook: the possibility of the US imposing steeper tariffs against the EU. This potential trade friction could hinder the ongoing recovery.
Exceeding Expectations
The HCOB Spain Manufacturing PMI for May 2025 registered a significant improvement, climbing to 50.5 from 48.1 in April, according to S&P Global. This figure surpassed analyst expectations of 48.4, marking the first expansion in the Spanish manufacturing sector after three consecutive months of contraction, and representing the highest reading since January.
The higher May figure is potentially indicative of a slight improvement in underlying demand. While uncertainties had notably impacted the sector in April, the market appears to have readjusted somewhat in May.
Despite the overall positive movement, Spanish manufacturing sales volumes did fall in May, though this decline was the smallest in four months. Encouragingly, companies continued to hire for the third consecutive month. From a cost perspective, input costs fell for the first time since the beginning of last year, while output prices also dropped at the fastest rate since September 2024, primarily due to increased market competition. Sentiment regarding output for the next 12 months also saw a positive shift, rising to a three-month high.
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Source: Euro News
