European Industrials: Short Cycle Tracker: headline numbers down but underlying data more resilient

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European Industrials: Short Cycle Tracker: headline numbers down but underlying data more resilient

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European Industrials

Short Cycle Tracker: headline numbers

down but underlying data more resilient

Industry Overview

PMIs down slightly m/m but underlying data more resilient 02 July 2026

June manufacturing PMIs were down m/m in all regions, with Europe (51.4 from 51.6 in Equity

May) & China (51.7 from 51.8) marginally lower while the US fell more sharply (S&P 53.9 Europe

from 55.1). However, shorter supplier delivery times drove most of the m/m decrease, Industrials

and we believe this is actually a healthy indicator of easing supply chain tension. Indeed, Alexander Jones, CFA >>

the other sub-components of the EU and Chinese PMIs mostly improved m/m including a Research Analyst

slight sequential pick-up in new orders (to 51.7 and 50.3 respectively) and an improved MLI+44 (UK)20 7995 5828

employment index in China (50.5). The US data also remains encouraging overall, with alexander.jones2@bofa.com

new orders still close to 4yr highs. But there are signs of US deterioration that we think Benjamin Heelan >>

Research Analyst

are worth watching closely from here: (1) the employment index (per S&P) dipped to Merrill Lynch (DIFC)

47.1 (from 51.6 in May), now showing the largest contraction since May 2020; and (2) +44 20 7996 5723

benjamin.heelan@bofa.com

implied restocking is now the strongest in over 4yrs, driven by fears of further price

Uma Samlin >>

rises, potentially artificially boosting new order activity. Overall, we think the PMI data Research Analyst

suggests easing supply chain tensions may be slightly boosting activity levels, but that MLI (UK) +44 20 7995 1964

several watch items remain (destocking, cost pressure – discussed further below).