Eurozone Manufacturing Industry Rises Sharply in January: Markit

The Eurozone manufacturing industry expanded at the sharpest rate in 32 months, as strong output in Germany and a return to growth in Greece led the currency bloc’s nascent recovery.

Markit Group’s gauge of Eurozone manufacturing activity rose in January from 52.7 to 54, beating estimates. A reading above 50 signifies expansion in the manufacturing industry.

Stabilization in a number of Eurozone economies, combined with rising levels of new export business, drove manufacturing recovery in January. New export business was strong throughout the currency region, with France and Greece experiencing a return to growth. Greece’s manufacturing industry expanded at the fastest pace in 65 months, as the overall gauge of manufacturing output moved back into expansion territory. France, on the other hand, remained in contraction, with an overall reading of 49.3.

Apart from improvements in peripheral nations, Germany continued to spearhead economic recovery in the now 18-nation currency bloc. Germany’s manufacturing industry reached a 32-month high, Markit data showed. The upturn was also led by the Netherlands and Austria, which recorded the second- and third-highest PMIs, respectively.

Job growth was positive for the first time in nearly two years, led by Germany, Italy and Ireland. Job creation was also recorded for Spain and Australia. Meanwhile, job losses eased in France and Greece, but accelerated in the Netherlands, which reported the first decrease in staffing levels in five months.

“The [E]urozone manufacturing recovery gained significant further momentum in January,” wrote Markit chief economist Chris Williamson in an official statement. “However, perhaps the most important development in the report is the further revival of manufacturing in the region’s periphery. Both Italy and Spain are seeing robust growth of output and order books, and the Greek PMI’s rise above 50 for the first time since August 2009 is an important signal of how even the most troubled member states are returning to growth.”