Eurozone factories increase production
Factory activity increased in November in many Eurozone member states. Markit’s Purchasing Managers’ Index showed a rise from 51.3 in October to 51.6 last month, the fifth month in a row that the PMI Index recorded a reading above 50 and the highest since June 2011. This level indicates growth and is a positive sign of recovery in the region.
Germany in particular had its best month since the middle of 2011, posting a PMI of 52.7, up from 51.7 in October. The largest economy in the Eurozone was boosted by new business and
accelerated output. Greece and Italy also showed positive signs of growth, with Italy’s Index advancing at the fastest pace in two and a half years, rising by 0.7 to 51.4 in November. Factory output in Greece increased for the first time since September 2009, posting a PMI of 49.2 which was an increase of 1.9 from October this year.
In contrast, struggling manufacturing sectors in France and Spain meant their outlook was not so confident. France’s PMI dipped to 48.4 from 49.1 in October and manufacturers have also been making cutbacks on staff in the factories. The country faced similar problems in October when the economy shrank slightly. Spain, who had consistently posted Index marks over 50, fell below the mid-point for the first time in three months, demonstrating how temperamental recovery is at this time.
The Eurozone economy remains in a vulnerable state, despite the PMI generally showing good results. Markit’s chief economist, Chris Williamson said a “major concern is that employment continues to fall as companies seek to become leaner and more competitive. Any substantial improvement to the region’s record unemployment still seems frustratingly far off”.
