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Eurozone manufacturing economy maintains recovery pace in November: Markit

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Eurozone manufacturing economy maintains recovery pace in November: Markit

Manufacturing output in the Eurozone economy maintained its recovery pace in November, as output, new orders and new exports expanded for a fifth consecutive month. The manufacturing PMI indicator rose 0.1 percentage point to 51.6, beating estimates.

Markit Group releases manufacturing PMI on a monthly basis. The closely monitored reports are used to gauge business conditions in the manufacturing industry. A reading above 50.0 signifies growth, whereas a reading below 50.0 indicates contraction.

While modest overall, expansion in the manufacturing industry shows recovery is still occurring in some parts of the euro region. The PMI reading is the highest since June 2011; the rate of output growth and new work accelerated at the fastest pace since August, and non-domestic orders reached a two-and-a-half year high.

Growth was led by positive contributions from the following five countries (in order): Netherlands (56.8), Austria (54.3), Germany (52.7), Ireland (52.4) and Italy (51.4). PMI soared to 31-month high in the Netherlands, a 30-month high in Austria and a 29-month high in Germany. The manufacturing economies of Spain and France contracted in November, with Spain hitting a six-month low of 48.6.

The monthly readings “bring good news on the whole, but suggest there’s still a lot to worry about in terms of the health of the Eurozone economy,” said Chris Williamson of Markit. “Overall… the pace of growth remains only modest, [suggesting] output is rising at a quarterly rate of only around 0.6 percent in the fourth quarter so far.”

Much like last week’s employment data, manufacturing PMI shows a widening gap between north and south. The southern European states continue to show signs of renewed downturn, which threaten the overall pace of regional recovery. France sunk to the bottom of the region’s PMI rankings, having been the only country other than Greece to experience declining exports. Greek manufacturers reported their first output growth in more than four years.

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