Eurozone manufacturing growth accelerates in December

By Tuba Sahin

ANKARA (AA) - The eurozone manufacturing economy gained momentum in December with the backing of Germany's strong growth figure, according to a London-based global data company report published Monday.

The Purchasing Managers’ Index (PMI) for the eurozone manufacturing sector rose to 55.2 in the month, up from 53.8 in November, the IHS Markit data showed.

The reading, standing above the crucial 50.0 no-change mark that separates growth from contraction for a sixth successive month, hit its highest since May 2018.

Investment goods producers recorded the strongest improvement, followed by intermediate goods, it noted.

The rise in December PMI was linked to a similar-sized increase in new orders, which also rose for the sixth month in a row.

Germany saw the best expansion rate for nearly three years, and the Netherlands registered its best performance for over two years.

Greece remained the only nation in manufacturing contraction territory, according to data.

Chris Williamson, chief business economist at IHS Markit, stressed that the strong note of eurozone manufacturing stemmed from production growth accelerating to one of the fastest seen over the past three years.

"The solid performance of manufacturing amid the tightening of COVID-19 restrictions in the closing months of 2020 represents a major contrast to the lockdowns earlier in the year, with factories acting as a crucial support to the economy as the service sector is hit by tough social distancing measures," Williamson said.

As a critical gauge of manufacturing sector health, monthly PMI indices are based on surveys and national data, and indicate growth compared to the previous month when above 50 points and contraction when below.