LONDON (ICIS)--The eurozone’s manufacturing sector generated the strongest month-on-month increase in output in over two-and-a-half years during December, analyst Markit said on Thursday, providing the latest sign that the region’s economic recovery may be firming.
Markit said that the region’s manufacturing sector Purchasing Managers’ Index (PMI) for December was 52.7, the third consecutive month of expansion and the highest rate of growth for 31 months.
The manufacturing sector output for the region was 51.6 in November, Markit added. Any PMI figure above 50.0 indicates growth. The rate of expansion in the final quarter of the year is consistent with a manufacturing sector expansion of 0.6% in total, Markit added.
“With producers reporting further growth of new orders, exports and backlogs of work, the stage is set for a good start to 2014, during which it seems likely that the manufacturing sector will help drive a meaningful, albeit still modest, recovery in the wider economy,” said Markit chief economist Chris Williamson.
The sector growth was underpinned by strong performances by the Netherlands, Germany, Ireland, Italy and Austria, with even Greece approaching growth levels at 49.6, a 52-month high. France’s economic slowdown seemed to deepen in the face of the generally positive picture across the region, Markit said, with a manufacturing PMI level of 47 representing its lowest growth rate in seven months.
France’s performance “remains a concern”, Williamson said, adding that regulatory reforms to increase competitiveness may be necessary to arrest a growing divide between France and fellow key eurozone economies.
“While Germany, Italy and Spain are seeing the strongest output growth since early 2011, buoyed to varying degrees by improved export sales, France is seeing a steepening downturn, in part the result of widening export losses. This suggests that competitiveness is a key issue which the French manufacturing sector needs to address to catch up with its peers,” he added.