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Eurozone manufacturing PMI rises to near-record high

Staff Writer | December 5, 2017
The upturn in the euro area manufacturing sector continued to surge forward in November.
Eurozone manufacturing
Europe   IHS Markit Eurozone Manufacturing PMI
Strong accelerated expansions in production and new orders, aided by series-record growth in new export business, underpinned the steepest increase in employment since the survey began in June 1997.

The final IHS Markit Eurozone Manufacturing PMI rose to 60.1 in November, its best reading apart from April 2000’s series-record high.

The headline PMI has now remained above the neutral 50.0 mark for 53 months, with the latest figure slightly above the earlier flash estimate of 60.0.

November saw rates of improvement in overall operating conditions strengthen across the consumer, intermediate and investment goods sectors.

The fastest rate of increase was seen in investment goods and the slowest at consumer goods producers.

Growth hit a series-record in the intermediate goods category.

November saw the upswing in the eurozone manufacturing sector remain broad-based by nation, with all of the countries covered by the survey reporting expansions for the sixth straight month.

The upturn was again led by a solid core of Germany, the Netherlands and Austria, with growth accelerating to record highs in the latter two and to slightly below one in Germany.

The Ireland PMI also posted one of its highest readings so far.

Growth also improved to multi-year highs in Italy (81- month record) and France (84-month high) and rose to a near 11- year peak in Spain.

Greece registered the weakest growth overall, although its PMI nonetheless stayed in expansion territory for the sixth consecutive month.

November saw rates of expansion in production and new orders rise to the highest since February 2011 and April 2000 respectively.

Companies reported strong inflows of new work received from both domestic and non-domestic clients.

The level of new export business* rose at the fastest pace since the survey began in June 1997.

Rates of expansion improved across all of the nations covered, reaching near series-record highs in six (Germany, Italy, Spain, the Netherlands, Ireland and Austria).

There were reports of stronger trade flows from the USA, Asia and between EU nations.

Strong new order inflows led to the steepest accumulation of backlogs of work since data on outstanding business were first collected in November 2002.

Brighter market conditions and the resulting pressure on capacity were also the main factors driving up employment, with job creation hitting a fresh survey-record high.

Staffing levels were raised in all of the nations covered by the survey, with almost all seeing a faster pace of increase (the sole exception being Italy).

Moreover, rates of job creation were either at (the Netherlands), or close to (Germany, Spain, Austria and Greece), survey-record highs in a number of countries.

Price pressures intensified in November.

Input costs rose at the quickest pace in six-and-a-half years, while output charges increased to the greatest extent since June 2011.

Increased input costs reflected a combination of rising commodity prices and a sellers’ market developing for certain inputs.

The latter factor was further highlighted by the trend in supplier delivery times, which lengthened to one of the greatest extents in the survey history.

Pressure on vendor capacity reflected increased demand for inputs, as purchasing activity at manufacturers rose at the sharpest pace in over seven-and-a-half years.