Eurozone manufacturing growth accelerates in final month of 2020 - IHS Markit

According to the report from IHS Markit, the seasonally adjusted Eurozone Manufacturing PMI improved to its highest since May 2018 during the final month of 2020. Posting 55.2, up from 53.8 in November but a little softer than the earlier flash reading, the headline index was above the crucial 50.0 no-change mark that separates growth from contraction for a sixth successive month.

Although all three broad market groups recorded an improvement in operating conditions since November, rates of growth were noticeably different. Investment goods producers recorded the strongest improvement, followed by intermediate goods where marked growth was also registered. In contrast, only a marginal strengthening in operating conditions was seen amongst consumer goods producers. 

A sixth successive monthly increase in manufacturing production was signalled by the latest data, with the rate of expansion marked and up since November. The improvement was linked to a similarsized increase in new orders, which also rose for the sixth month in a row. New export orders increased markedly and to a greater extent than in November. 

There remained evidence of some pressure on capacity as backlogs of work increased for a fifth successive survey period and at a rate that was close to October’s 32-month high. However, firms on average made further cuts to their staffing levels, extending the current period of decline to 20 months. 

Finally, confidence about the coming 12 months improved to the highest level in nearly three years as optimism rose on hopes that operating conditions would be closer to normal by the end of 2021. Italian and Dutch manufacturers were the most confident in December.