Darkest days likely over for euro zone factories, Dec PMIs show
The final S&P Global Manufacturing Purchasing Managers’ Index (PMI) rebounded to 47.8 in December from 47.1 in November, matching a preliminary reading but still below the 50 mark that separates growth from contraction .
An index measuring production, which includes a composite PMI due on Wednesday and seen as a good gauge of economic health, also came in at 47.8, up from November’s 46.0, marking the seventh straight month of reading sub-50 but the highest since June.
The final data was collected earlier than usual last month due to the holiday season.
“The second successive monthly cooling in the rate of factory output losses brings some cheer to the beleaguered manufacturing sector as we begin the new year,” said Chris Williamson, chief economist at -business at S&P Global Market Intelligence.
“The outlook has improved amid signs of healing supply chains and a notable softening of inflationary pressures, as well as calming concerns about the region’s energy crisis, thanks in part to government assistance. “
While the input and output price sub-indices remained high, both fell substantially, likely welcome news for policymakers at the European Central Bank who have been trying to calm rampant inflation. by tightening monetary policy.
With inflationary pressures easing, supply chains healing and an energy crisis likely averted purchasing managers became optimistic and the index of future production jumped to 53.8 from 48.8.
“The number of optimists about the coming year has also now surpassed pessimists for the first time since August, hinting at a steady improvement in business confidence,” said Williamson.
(Reporting by Jonathan Cable; Editing by Hugh Lawson)