Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

Euro zone factory PMI bounces but recovery uneven

Published 12/01/2010, 04:00 AM
Updated 12/01/2010, 04:04 AM

* Euro zone manufacturing sector picks up in Nov

* German, French growth offsets other countries

* Firms building a backlog of orders

By Jonathan Cable

LONDON, Dec 1 (Reuters) - The euro zone's manufacturing sector expanded at its fastest pace in four months in November, although slightly slower than previously thought, as Germany and France continued to outshine smaller members, surveys showed on Wednesday.

The Markit Eurozone Manufacturing Purchasing Managers Index (PMI) rose to 55.3 in November, nudged down from an earlier estimate of 55.5 but comfortably above the final reading of 54.6 for October.

While still firmly above the 50 mark that divides growth from contraction, the reading is some way off April's post-recession high of 57.6.

Manufacturers reported improved output last month, with the index rising to 55.8 from October's 54.7, but they still managed to build up a backlog of work, the survey of about 2,000 companies showed.

"November's PMIs showed that manufacturing conditions picked up at greatly improved rates in Germany and France. However, conditions are far less rosy in other parts of the euro zone," said Chris Williamson at Markit. Data from Germany on Wednesday showed its manufacturing sector expanded significantly faster last month than in October while France's PMI bounced to a level not seen in 10 years.

But Italian numbers showed conditions improved at their weakest rate for nine months and stagnation was seen in Spain.

Ireland, which accepted an 85-billion-euro European Union emergency aid package on Sunday, saw a slight upturn in activity but still below levels needed for a meaningful recovery.

A similar two-speed recovery is happening in the bloc's dominant service sector, according to flash numbers expected to be confirmed on Friday. [EUR/PMIS]

The European Central Bank is expected to leave interest rates on hold at a record low 1.0 percent when it meets on Thursday -- and at least until next October -- as it battles to support the bloc's fragile recovery. [ECB/INT]

The bloc as a whole escaped from its worst post-war recession in the third quarter of last year. However, the recovery is expected to be slow and steady, with austerity measures introduced to tackle the region's debt crisis weighing on consumer sentiment.

Still, the euro zone PMI's backlogs of work index rose to 53.5 from October's 53.1 and has been above the 50.0 mark for a year, suggesting firms are accumulating work as the manufacturing-led recovery continues.

Data released on Wednesday showed unemployment rose to 10.1 percent in October, slightly up from the 10.0 seen in September, but the PMI survey showed manufacturing firms in the euro zone took on workers at the fastest rate last month since mid-2007. (Editing by Susan Fenton)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.