Eurozone manufacturing downturn continued in December
By Benjamin Chiou
Date: Tuesday 02 Jan 2024
(Sharecast News) - Manufacturing activity in the eurozone declined for the ninth straight month in December, according to new figures released Tuesday by S&P Global and Hamburg Commercial Bank (HCOB).
The eurozone manufacturing purchasing managers' index (PMI) rose marginally to 44.4, from 44.2 in November. The consensus estimate was for an unchanged reading from the initial 'flash' estimate of 44.2.
According to the release, factory job losses extended into a seventh successive month, but finer details of the report showed that there were some improvements from November.
"There were movements in some sub-indices to suggest the worst of the industry's slump has passed, with contractions in new orders and purchasing activity easing, while business confidence edged up to an eight-month high," S&P Global and HCOB said.
"That said, goods producers across the euro area continued to reduce their stocks amid absent demand pressures, while suppliers' delivery times improved again, signalling greater spare capacity at vendors."
In terms of individual country performance, Greece was the only major economy showing an improvement in activity, with its PMI rising to a four-month high of 51.3. Germany's manufacturing PMI was at an eight-month high but remained firmly in negative territory at 43.3, while the France's reading dropped to a 43-month low of 42.1.
Tuesday's data was "a stark reminder of the persistent challenges faced by the manufacturing industry", according to economist Claus Vistesen from Pantheon Macroeconomics.
"The fall in production is underpinned by a steep decline in inflows of new business, leading to a depletion of work backlogs. In addition, purchasing activity by manufacturers has plunged, presently recording one of the steepest since the global financial crisis."
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