Eurozone Manufacturing Index Dips In December

Jan. 2, 2007
Despite slight fall, PMI continues to grow.

The eurozone's purchasing managers' index fell to 56.5 in December from 56.6 the previous month but remained strong enough to signal robust growth in the manufacturing sector, according to figures published Tuesday.

Despite the slight fall in the Purchasing Managers' Index (PMI) the data "shows the Eurozone manufacturing economy growing at a robust pace," according to NTC Economics, which carried out the survey. A reading above 50 means that the sector is expanding.

Output rose for the 19th consecutive month, although rates of growth varied considerably among the large eurozone nations, ranging from rapid and accelerating growth in Germany to far more modest and slowing growth in France.

"In fact the latest figures signal an improvement in business conditions for the 18th consecutive month. The rate of growth remains. . . similar to that seen over the previous nine months, reflecting further output, new orders and employment growth," NTC said in its findings.

But Bank of Scotland economist Kevin Gaynor said "the stability of the PMI over the past nine months hides some worrying national trends, however." He said, "Germany clearly remains the powerhouse, assisted by the recent strengthening of growth in Spain. In contrast growth slowed sharply in France, due largely to weaker domestic demand, and signs of weakness continued to appear in Italy."

The independent research company NTC produces the figures for the Royal Bank of Scotland group.

The PMI report features data collected from "a representative panel of 3,000 companies" in the eurozone manufacturing sector.

Copyright Agence France-Presse, 2007

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