|Source: Markit |
The Markit Final Eurozone
Manufacturing PMI (Purchasing Managers' Index) rose to 57.1 in December, up from
the earlier flash estimate of 56.8 and its highest reading since April’s
46-month peak. The level of the PMI accelerated throughout Q4 2010 and has
remained above the neutral 50.0 mark for 15 months in a row. Growth of output and new orders drove job creation
to a 10-year high.
The average PMI reading for the final quarter
was 55.7, slightly above the 55.2 recorded in Q3, but below Q2’s
three-and-a-half year high of 56.4. For 2010 as a whole, the PMI average (55.4)
was well above that for 2009 (43.3).
National PMI readings generally moved higher,
led by a near record in Germany. The only exceptions were France (which
nevertheless saw the fourth highest PMI reading overall) and Greece (where the
PMI remained well below the 50.0 no-change mark).
Manufacturing production rose for
the seventeenth consecutive month and at the fastest pace since July.
The expansion was led by strong
growth in Germany and robust expansions in France and Austria. Italy saw a
marked improvement in its rate of increase, which hit a five-month high. Growth
accelerated in the Netherlands (seven-month peak) and Ireland (fastest since
June), while Spain saw renewed expansion following November’s decline. Although
Greek manufacturing remained mired in deep recession, the rate of contraction
eased to a five-month low.
Consumer, intermediate and investment goods producers all reported faster growth of output. Capital
goods was the stellar performer, seeing a rate of increase exceeded only once in
the 13-year survey history (April 2000). Consumer goods remained the weakest
December saw the fastest growth of new orders since April,
led by marked increases in Germany, the Netherlands, Austria and France. Italy
and Spain meanwhile saw renewed growth, while the rate of increase in Ireland
accelerated slightly. In contrast, Greece saw new orders fall at the steepest
pace since March 2009.
New export orders
increased at the fastest rate for seven months. Growth was especially strong in
Germany and France, but also generally picked up elsewhere in the currency
union. The only exceptions were a slower increase in Ireland and a further
marked decline in Greece.
There was also evidence that Eurozone
manufacturers – especially those in the strongest performing nations – were
preparing for further production growth in the coming months. Purchasing activity increased to the greatest extent
in eight months in December, and input inventories rose for only the second time
in the past three-and-a-half years. Meanwhile, stocks of finished goods declined
again and this, combined with stronger new order inflows, drove the new
orders-to-inventories ratio to an
December saw jobs growth accelerate for the fourth month running to its fastest pace
since October 2000. Germany reported a survey record rate of increase, while
Austria saw near record job creation. The Netherlands and France saw employment
rise again, but at slower rates than in November. The labour market recovery
also broadened to include Italy and Ireland. Only Spain and Greece reported job
May 2000’s survey record high. Companies saw
higher prices for energy, plastics, steel and textiles. Cost inflation
accelerated in almost all of the nations covered by the survey, the sole
exception being Ireland. The Netherlands saw the highest rate of increase,
although the sharpest accelerations were in Austria, Germany and Spain.
Part of the increase in costs reflected
ongoing supply-chain pressures,
as average vendor lead times deteriorated to the greatest degree since July.
Chris Williamson, Chief Economist at Markit
said: "Manufacturing output growth gathered pace again in
December, putting the sector on a strong footing to start the New Year. The data
are consistent with industrial production rising across the single currency area
at a quarterly rate of 2%. Although down from May’s near 3% peak, December’s
growth represents a reassuring revival from the slowdown seen during the autumn.
"Germany remained the star performer, seeing near-record growth,
followed by France, where the PMI slipped only slightly from November’s ten-year
peak. However, welcome signs of recoveries were also evident in the periphery,
where export sales helped boost output growth in all cases except Greece, where
the rate of decline at least moderated.
"The data therefore suggest that the manufacturing recovery may
be broadening out to help lift economic growth outside of the French-German core
in early 2011."
The Eurozone Manufacturing PMI
(Purchasing Managers' Index) is produced by Markit and is based on original
survey data collected from a representative panel of around 3,000 manufacturing
firms. National data are included for Germany, France, Italy, Spain, the
Netherlands, Austria, the Republic of Ireland and Greece.
|Source: Markit |