Euro zone Nov manufacturing up, but inflation tightens squeeze
By Frank Prenesti
Date: Wednesday 01 Dec 2021
(Sharecast News) - Euro zone manufacturing growth rose slightly in November with worsening supply chain constraints hitting output and sending raw materials costs soaring, according to a survey released on Wednesday.
Growth slowed at intermediate and investment goods makers, although consumer goods producers grew faster, IHS Markit's survey of purchasing managers revealed.
Its final manufacturing Purchasing Managers' Index (PMI) edged up to 58.4 in November from October's 58.3, short of an initial 58.6 flash estimate. A mark above 50 separates growth from contraction.
The survey noted that companies were still being hammered by material shortages, poor transport availability and staffing issues at vendors. Higher costs forced factories to increase prices at the fastest rate in since the survey began in 2002.
An index measuring output, which feeds into a composite PMI due on Friday and seen as a good guide to economic health, rose to 53.8 from October's 53.3.
"A strong headline PMI reading masks just how tough business conditions are for manufacturers at the moment. Although demand remains strong, as witnessed by a further solid improvement in new order inflows, supply chains continue to deteriorate at a worrying rate," said IHS Markit chief business economist Chris Williamson.
Factories have also passed on more of rising costs to customers and increased their prices at the fastest pace since IHS Markit began collecting data. The output prices index climbed to a survey high of 73.7 from 72.6.
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