Investing.com – Manufacturing activity in the euro zone contracted for the fifth consecutive month in December, official data showed on Monday.
In a report, market research group Markit said that its final reading of the euro zone’s manufacturing purchasing managers’ index held steady at 46.9 in December, broadly in line with expectations and unchanged from a preliminary estimate.
The euro zone’s manufacturing PMI in November fell to a 28-month low of 46.4.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
The average PMI reading in the fourth quarter of 2011 was the weakest since the second quarter of 2009.
The downturn in the euro zone manufacturing sector extended into a fifth successive month in December, as companies faced declining order inflows, a slowing global economy and ongoing financial market turbulence.
For the second consecutive month, all of the nations covered by the survey reported lower levels of output. Germany, France, the Netherlands and Austria all saw only mild falls, while marked contractions were seen in Italy, Spain and Greece.
Commenting on the report, Chris Williamson, Chief Economist at Markit said, “Euro zone manufacturing is clearly undergoing another recession.”
He added that, “The survey also points to a strong likelihood of further declines in the first quarter of the new year, with producers cutting back headcounts, inventories and purchasing.”
Following the release of the data, the euro was fractionally lower against the U.S. dollar, with EUR/USD easing down 0.05% to trade at 1.2949.
Meanwhile, European stock markets held on to gains. The EURO STOXX 50 rose 0.7%, France’s CAC 40 added 0.45%, Germany's DAX jumped 1%, while London’s FTSE 100 remained closed for the New Year’s holiday.
In a report, market research group Markit said that its final reading of the euro zone’s manufacturing purchasing managers’ index held steady at 46.9 in December, broadly in line with expectations and unchanged from a preliminary estimate.
The euro zone’s manufacturing PMI in November fell to a 28-month low of 46.4.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
The average PMI reading in the fourth quarter of 2011 was the weakest since the second quarter of 2009.
The downturn in the euro zone manufacturing sector extended into a fifth successive month in December, as companies faced declining order inflows, a slowing global economy and ongoing financial market turbulence.
For the second consecutive month, all of the nations covered by the survey reported lower levels of output. Germany, France, the Netherlands and Austria all saw only mild falls, while marked contractions were seen in Italy, Spain and Greece.
Commenting on the report, Chris Williamson, Chief Economist at Markit said, “Euro zone manufacturing is clearly undergoing another recession.”
He added that, “The survey also points to a strong likelihood of further declines in the first quarter of the new year, with producers cutting back headcounts, inventories and purchasing.”
Following the release of the data, the euro was fractionally lower against the U.S. dollar, with EUR/USD easing down 0.05% to trade at 1.2949.
Meanwhile, European stock markets held on to gains. The EURO STOXX 50 rose 0.7%, France’s CAC 40 added 0.45%, Germany's DAX jumped 1%, while London’s FTSE 100 remained closed for the New Year’s holiday.