Eurozone manufacturing downturn worsens as PMI revised lower
By Benjamin Chiou
Date: Thursday 02 Jan 2025
(Sharecast News) - The contraction of the eurozone's manufacturing sector was slightly worse than originally estimated in December, according to revised estimates from S&P Global and the Hamburg Commercial Bank (HCOB).
The final reading of the single-currency region's manufacturing purchasing managers' index came in at 45.1, down from the initial estimate of 45.2 released two weeks ago which was unchanged from November.
This was the 30th successive sub-50.0 reading - the level which separates contraction and growth - marking two and a half years of continuous decline in factory operating conditions across the eurozone.
While business confidence was at a four-month high, December saw faster falls in both new factory orders and output, the survey showed.
"The year was closed off with accelerated contractions in both new orders and output, while sharp reductions were made to purchasing activity and inventories of inputs," HCOB said.
The region's two largest economies, Germany and France, continued to provide a big drag on the overall headline reading: the Germany manufacturing PMI fell to a three-month low of 42.5 while the French reading was 41.9, its lowest in more than four and a half years.
"Even in December, the manufacturing sector is not delivering any holiday cheer. It is the same old story - downward. New orders have dropped even more than in the previous two months, crushing any hopes for a quick recovery," said Cyrus de la Rubia, the chief economist at HCOB.
"A sign of the industry's recovery will be when companies start rebuilding their inventories of intermediate goods, but December showed no signs of this happening."
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