European factory output stabilises further but Asia and US struggle

European manufacturing took another step towards stabilisation in May but US activity contracted for a third straight month and Asian factory activity shrank as soft demand in China and US tariffs took a heavy toll, surveys showed, highlighting the darkening outlook for the once fast-growing region.

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US President Donald Trump's flip-flopping on trade tariffs-including Friday's surprise doubling of levies on imported steel and aluminium-has left firms unsure about where the charges will settle.

Still, production increased for a third consecutive month in Europe's common currency area, supported by a near-stabilisation in demand.

The HCOB Eurozone Manufacturing Purchasing Managers’ Index rose to 49.4 in May from 49.0 in April, marking a 33-month high and in line with a preliminary estimate but remaining below the 50.0 threshold separating growth from contraction.

France's PMI moved closer to breakeven at 49.8, a 28-month high. But Europe's largest economy, Germany, remained the weakest performer among the big Eurozone members with a PMI of 48.3.

"I wouldn't read too much into the numbers today. A bit up for France, a bit down for Germany," said Salomon Fiedler at Bernberg.

"For the Eurozone as a whole we are stable."

In Britain, outside the European Union, the downturn was less steep than first feared in May but output, orders and jobs continued to drop as companies cited recent tax hikes and Trump's tariffs.

US manufacturing activity fell to a six-month low in May and suppliers took longer to deliver inputs amid tariffs, potentially signaling looming shortages of some goods.