The crisis in European manufacturing industry is far from over, writes Paolo Grignani, senior economist at Oxford Economics, in a comment on the barrage of preliminary purchasing managers' indexes pumped out from major European economies on Monday morning.
"Not much to be happy about"
Production levels are at their lowest levels in a year, employment indicators are weak, and demand is still weak – both globally and on the home market, he notes.
"Despite all this, inflation pressure has not really subsided", he writes.
He notes that the service sector is recovering after a worrying setback in November, but adds:
"Not much to be happy about".
The purchasing managers' index for the eurozone's manufacturing industry in December was unchanged at 45.2, according to preliminary figures. This was slightly worse than feared. Analysts had expected a marginal increase to 45.3, according to a compilation of forecasts made by Bloomberg.
An index value below 50 indicates decreased activity in the sector.
The service sector surprises positively. There, the index for December rises to 51.4 – up from 49.5 in November. Analysts had expected an unchanged level.
Overall, this gives a composite index for the eurozone in December of 49.5 – up from 48.3 in November. Analysts had expected a marginal decline to 48.2.
German manufacturing industry is a concern. There, the purchasing managers' index fell to 42.5 in December, down from 43.0 in November. Analysts had expected a marginal increase to 43.1.
Same picture in French and British figures
The pattern is repeated in both France and the UK, according to separate measurements.
For the French manufacturing industry, the purchasing managers' index fell to 41.9 in December, from 43.1 in November. Analysts had on average expected a decline to 43.0 in December.
In the UK, the purchasing managers' index for the manufacturing industry fell to 47.3, compared to 48.0 in November. There, expectations were for an increase to 48.5.
This afternoon, the purchasing managers' index for December from the USA will also be released.
