Manufacturing PMIs turn around

Manufacturing PMI indices dropped in Czechia, Hungary, and Poland in May. The index was disappointingly low in the case of Czechia and Poland, while in Hungary, the change was rather marginal. In Czechia, the overall downturn in the sector worsened midway through the second quarter amid a faster decline in output levels and a renewed drop in new orders. Poland experienced a sharp reversal, as recent readings of the manufacturing PMI had been above the threshold of 50. The fall to 47.1 in May was quite surprising, driven by a decline in new orders that led to a contraction in output. Only in Romania did market sentiment improve marginally in May. This improvement in the PMI was mainly driven by the output component. Romanian manufacturing had a slower-than-expected start to the year, but the trend now looks promising.