Activity in the euro zone’s manufacturing sector is growing rapidly, tapping into economic strength across the bloc and at major international trading partners, according to a poll of industry executives released on Friday.
The IHS Markit final factory purchasing managers index for the euro zone clocked in at 60.1 in November, up from a flash estimate of 60 and 58.5 in the previous month. Economists polled by Reuters had expected the gauge to hold steady from the first estimate.
November’s reading is the second-highest on record, trumped only by one in April 2000. Germany, the euro zone’s powerhouse, also had its second best month in the gauge’s history, while France’s factory PMI was at its highest in seven years.
The report suggests that business leaders reckon the manufacturing industry has fully recovered from a sharp contraction during the global recession in 2008-09 and another fall sparked by the euro zone debt crisis in 2011.
“November’s surveys produced a clean sheet of improved PMI readings for all countries, resulting in the best performance for euro zone manufacturing since the height of the dot-com boom over 17 years ago,” said Chris Williamson, chief business economist at IHS Markit.
“The buoyant November data looks likely to add to the global dominance of euro area manufacturing seen so far this year.”
Companies reported “strong inflows of new work” from domestic and international clients. In particular, executives reported rising trade with the US, Asia and between EU countries.
In what could be a positive sign for the European Central Bank, price pressure picked up in November, with input costs rising at the quickest level in six and a half years.
That contrasts a string of disappointing inflation readings suggesting price growth at the consumer level remains well below the central bank’s 2 per cent target.
– Copyright The Financial Times Limited 2017
