Eurozone manufacturing activity contracts for 5th straight month

Eurozone manufacturing activity contracts for 5th straight month

Despite rising to 2-month high, euro area manufacturing PMI still below threshold level in November

By Tuba Sahin

ANKARA (AA) – Euro area manufacturing activity continued contracting for the fifth consecutive month, according to preliminary flash data released on Wednesday.

Eurozone manufacturing purchasing managers' index (PMI) increased to 47.3 in November, up from 46.4 in October, data from US-based financial services company S&P Global showed.

While a reading above 50 indicates growth, below that shows contraction.

Factory output decreased for a sixth consecutive month in November, while new orders fell at a reduced rate.

Meanwhile, flash eurozone services PMI activity index remained unchanged at 48.6 in November.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said on the positive side, supply constraints showed signs of easing during the month.

"Price pressures, the recent surge of which has prompted further policy tightening from the European Central Bank, are also now showing signs of cooling, most noticeably in the manufacturing sector. Not only should this help contain the cost of living crisis to some extent, but the brighter inflation outlook should take some pressure off the need for further aggressive policy tightening," Williamson added.

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