Euro manufacturing growth hits four-month high
Europe’s manufacturing industries expanded at the fastest pace in four months in November, led by Germany, the region’s largest economy.
A gauge of manufacturing in the 16-nation euro area rose to 55.3 from 54.6 in the previous month, London-based Markit Economics said today. It had previously reported an increase to 55.5 in November. A reading above 50 indicates expansion.
Germany has powered the region’s recovery as global demand boosted sales at companies from Daimler AG to BASF SE.
The European Commission said on November 29 that while German growth will outpace the euro region’s expansion this year, the economies of Ireland, Spain and Greece may continue to shrink.
“Eurozone economic activity lost momentum in the third quarter and it seems likely to be relatively muted over the coming months,” said Howard Archer, chief European economist at IHS Global Insight in London.
“Tightening fiscal policy across the region, high unemployment, recurring sovereign-risk problems and slower global activity are serious threats.”
In Germany, the manufacturing gauge rose to 58.1 from 56.6 the previous month, below an initial estimate of 58.9. France’s indicator increased to 57.9 from 55.2, while the Italian gauge fell to 52 from 53.
Europe’s so-called peripheral nations continued to struggle. Ireland’s index was 51.2, while Spanish manufacturing stagnated and Greece’s contracted.
Euro-region growth may weaken to 1.5pc next year from 1.7pc in 2010 as governments cut spending to reduce budget deficits, the Brussels-based commission said this week.
On November 28, Ireland became the second euro nation to receive external aid as officials sought to prevent a debt crisis from spreading.
A Chinese manufacturing gauge rose more than economists forecast in November, according to a report from the logistics federation today.
A PMI released by HSBC Holdings also jumped. In the US, the Institute for Supply Management’s factory index probably declined to 56.5 from 56.9, according to the median of 82 economists surveyed by Bloomberg.
Some companies have trimmed costs to revive earnings. ThyssenKrupp AG, Germany’s largest steelmaker, said yesterday that it returned to profit in the fiscal year through September after selling divisions and reducing its workforce.
Euro-region unemployment rose to 10.1pc in October, the highest in more than 12 years.
Markit said on November 4 that a euro-area services gauge rose to 55.2 in November from 53.3 in the previous month, while a composite index increased to 55.4 from 53.8 in October. Markit will release final figures for both indicators on December 3.