(MENAFN– ecpulse) Eurozone manufacturing recovery continued in November, with output, new orders and exports all expanding for fifth straight month, led by growth in Europe`s largest economy, Germany.
“The recovery in the Eurozone manufacturing sector accelerated again in November. Although the pace of expansion remained modest overall, the real positives were that growth extended into a fifth successive month with the rate of increase hitting a near two-and-half year high,” Markit said on its website on Monday.
Final Eurozone Manufacturing Purchasing Managers’ Index (PMI) rose to 51.6 last month, compared with October’s reading of 51.3, while analysts called for no change from the flash reading of 51.5. A reading above the neutral-50 mark signals expansion in business activity.
The headline PMI, at 51.6, marks the fastest pace of sector growth since June 2011.
The manufacturing uptrend in the euro area is basically attributed to growth in Germany. PMI manufacturing headline hit highest level for almost two-and-half years, as manufacturing output and new orders continued to accelerate in November as well amid robust rises in production and incoming new work despite further modest reduction in employment number last month.
Although output growth in manufacturing steadied at a robust rate in the fourth quarter of 2013, services sector expansion eased to the weakest since August.
The European Central Bank (ECB) was obviously on the right track when it decided to cut interest rates to a record low of 0.25% at its last meeting, and further signs of slowing in the rate of expansion into next year will even increase more pressure on policymakers to do more to prevent the Eurozone from spelling back in to another recession.
In the view of the positive PMI outlook for the Eurozone, the ECB is unlikely to sharpen its rate-cutting razor anytime soon, however, traders will keep a close eye on the ECB`s policy decision later this week amid signs that deflationary forces may be gathering.
Separately, PMI data from the UK signaled manufacturing growth hit two-and-half-year high, at 58.4 in November. That was the fastest pace of job creation since May 2011, while producton and new order growth at, or near, 19-year highs, according to data compiled by markit/CIPS.
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