Business activity in Europe's manufacturing sector keeps stabilizing

In May, the Purchasing Managers' Index (PMI) for the eurozone manufacturing sector rose to 49.4 and reached a 33-month high. The index growth matched preliminary estimates, but remained below the 50.0 threshold separating expansion and contraction.

Meanwhile, France's PMI came close to breaking even at a 28-month high of 49.8 points. But Europe's largest economy, Germany, once again posted the weakest performance among major eurozone economies at 48.3.

As noted by Salomon Fidler of Bernberg, if we look at the bloc of countries as a whole, the average indicator of industrial activity remains stable. So far, trade uncertainty has not exerted any significant pressure on the region's overall result.

However, for Asia, the impact of the new US tariffs has been more noticeable.

A decline in manufacturing activity was witnessed in export-dependent Japan and South Korea, especially in light of the auto tariffs imposed by Trump. Meanwhile, China's manufacturing activity in May was unchanged from the previous month.