Euro Manufacturing Output Narrowly Up in December

Jan. 4, 2010
European PMI index at 21-month high

Manufacturing activity across the eurozone expanded in December but at a slower pace than initially detected and with the shadow of price pressures building, a survey showed on Jan. 4.

The 16-nation euro currency bloc's purchasing managers' index (PMI) for the manufacturing sector, published by data and research group Markit, rose to 51.6 points in December, from 51.2 points in November.

It was the third month running in which the widely-watched reading has been above the crucial 50 boom-or-bust line, but the readings were uneven.

Output of investment goods and consumer goods rose fastest, while new orders increased for the fifth consecutive month. The rate of job losses eased slightly and Italy joined France and Germany in taking a significant leap forward.

However, it was the 19th month in a row in which people overall left the workforce instead of joining it, and Irish output fell while the downturns in crisis-hit Greece and Spain remained entrenched.

"The final December readings confirm that eurozone manufacturing ended the year on a positive note, with the headline PMI at a 21-month high," said Markit senior economist Rob Dobson. "Although this was tempered by the lower-than-flash outcomes for the output and new orders indexes, the rates of increase signaled for both these variables still represent a marked turnaround from the unprecedented downturn at the start of the year," he added.

The 16 nations which use the euro and the wider 27-nation European Union, home to half a billion people, posted expansion in the third quarter -- 0.4% in the eurozone area and 0.2% for the whole EU.

Copyright Agence France-Presse, 2010

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