Eurozone Manufacturing Sees Fastest Growth Since April

The Eurozone's manufacturing sector saw its fastest growth in nearly four-and-a-half years in July, according to a recent survey. The S&P Global Eurozone Manufacturing PMI Index rose to 51.9, just shy of its preliminary estimate of 52.0, marking the highest reading since April. However, this growth is largely driven by firms clearing backlogged orders rather than increasing demand.

The survey shows that output surged to a near four-and-a-half-year high in July, but new work inflows remain weak. Export orders declined again, with some countries experiencing more significant drops. Firms are relying on old orders to drive production growth, which may not be sustainable in the long term.

The ongoing conflict in the Middle East has disrupted supply chains and led to increased energy costs, causing difficulties for manufacturers. Despite this, input cost inflation eased to a five-month low in July, and factory gate prices rose at their softest pace since March.