Hungary's manufacturing PMI stood at 53.5 in July, up by 3.9ppts from June (49.6, which was revised upward from 49.5).

"The moderate contraction observed in the manufacturing industry in May and June has stopped and the sector has grown compared to June," the HALPIM said. The seasonally adjusted index has showed growth (above 50) in five of the past seven months and it was just below the 50-pt level in the other two. The issuer of the index said, however, that even these two figures may swing to above 50 after revisions later.

A PMI index figure above 50 indicates expansion while a figure below 50 shows contraction in economic activity.

The index has been above 50 points for more than three years before it dropped to 42.6 in October 2008 and hit its all-time low at 38.5 in January 2009. Hungary’s manufacturing PMI was above 50 pts in the first four months of this year, before it dropped to 49.8 in May.

July has been a relatively strong month over the past few years; the headline indicator was below the 50-pt mark only three times, in 1996 (49.3) and 2007 (49.6) and 2009 (49.2). The raw PMI showed an increase to 54.0 from 51.5 in June.

Bar two, every sub-index was above 50 points in the 7th month of 2010, and the new figures were higher than in June in all but two categories.

The Eurozone manufacturing PMI rose to a three-month high of 56.7 in July, up from 55.6 in June and above the earlier flash estimate of 56.5, markit reported. The reading signalled the tenth successive monthly improvement in overall operating conditions.

"While the final data confirmed a better-than-expected start to the third quarter for Eurozone manufacturers, they also highlighted a wide disparity in national performance," markit added.

Growth of production was strongest in Germany by a wide margin - accelerating sharply to hit a three-month high at 61.2 (vs. 58.4 in June). The index - a composite indicator designed to give a single-figure snapshot of operating conditions in the manufacturing economy - has now posted above the neutral 50.0 level for ten successive months. The latest reading signalled the second-sharpest improvement in operating conditions since the series began in April 1996.

Italy saw growth accelerate to a pace matching April’s post-recession peak (to 54.4 from 54.3) and Spain also saw output rise at the fastest pace since April to 51.6 in July from 51.2 in June)."

Source: Portfolio Online Financial Journal