Eurozone Manufacturing Activity Contracts In November

The Eurozone manufacturing sector contracted further in November on stronger declines in factory orders, production, purchasing activity and inventories, survey results from S&P Global showed on Monday.

The final HCOB factory Purchasing Managers' Index fell to 45.2 in November from 46.0 in October. The pace of decline was stronger than seen on average over the current period of decline.

"These numbers look terrible," Hamburg Commercial Bank Chief Economist Cyrus de la Rubia said. "It's like the eurozone's manufacturing recession is never going to end. As new orders fell fast and at an accelerated pace, there's no sign of a recovery anytime soon."

Factory production declined at a faster pace with investment goods segment remaining the worst performer.

There was a sharp and accelerated fall in new orders. This extended the current sequence of shrinking new business to just over two-and-a-half years. The survey showed that the backlogs of work declined sharply and incomplete order levels fell for the thirtieth month. Job losses accelerated and employment declined at the steepest pace since August 2020.

Companies reduced their purchasing activity and pre-production inventories in response to worsening demand conditions. Data showed a third consecutive monthly fall in operating costs faced by factories. The decline was the slowest seen over this period. This helped firms to offer discounts on their goods. Prices charged were reduced to the greatest extent since August.

Manufacturers remained optimistic of growth over the coming twelve months with the positive sentiment hitting a three-month high. However, confidence remained subdued by historical standards.

The downturn was centered on its three largest economies, namely Germany, France and Italy. Spain reported slower improvement.

The German manufacturing sector remained deep in contraction territory. The headline HCOB final manufacturing PMI held steady at 43.0, which was below the initial estimate of 43.2.

The PMI survey signaled a deepening downturn in the French manufacturing sector. The factory PMI registered 43.1 in November, down from 44.5 in October. The flash reading was 43.2.

Italy's manufacturing sector fell deeper into contraction zone in November with muted demand conditions remaining central to the downturn. The PMI dropped to 44.5 from 46.9 in the previous month.

Meanwhile, Spain's manufacturing activity continued to expand albeit at a slower pace in November. The index declined to 53.1 in November from 54.5 in October.

Official data released today showed that the euro area unemployment rate remained unchanged at seasonally adjusted 6.3 percent in October.

The number of unemployed declined 3,000 from the previous month. Compared to last year, unemployment was down 411,000.

The youth unemployment rate rose only marginally in October but remained at an elevated level. The rate came in at 15.0 percent, up from 14.9 percent in the previous month.

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