Manufacturing in the euro area accelerated at the fastest pace in 20 months in December as rising new orders propelled output.
A Purchasing Managers’ Index for the industry rose to 53.2 from 52.8 in November, exceeding a Dec. 16 estimate for an increase to 53.1, Markit Economics said on Monday. For the first time since April 2014, manufacturing expanded in all nations covered including Greece, according to the report.
The economic recovery in the 19-nation euro area is picking up as unprecedented stimulus by the European Central Bank is reaching companies and households. Bank lending accelerated in November in a sign of increased spending and investment, and economic confidence is at the highest level in more than four years.
“The conditions remain in place for a modest euro-zone cyclical upturn,” said Howard Archer, chief European economist at IHS Global Insight in London. “Much will depend on the global economic environment – and it is currently hard to see euro-zone growth really stepping up a gear.”
The euro was little changed after the report and traded at $1.0915 at 10:21 a.m. Frankfurt time.
In China, manufacturing weakened for a fifth straight month, the longest streak since 2009. The country’s benchmark stock index tumbled almost 7 percent and the yuan slumped after the report highlighting sliding exports thanks to sluggish growth abroad, and overcapacity at home. A gauge of Chinese services rose to the highest level in more than a year.
“The end of 2015 saw the euro-zone manufacturing recovery gain further traction,” said Rob Dobson, senior economist at Markit. “Italy remained the leading light in December, while accelerated growth in Germany and France added welcome buoyancy to the region’s manufacturing performance.”
Gauges for euro-area production, new orders and new export business all improved, according to Markit. At an average of 52.2 for all of 2015, the PMI exceeded results recorded in each of the prior three years, the London-based company said.
“While there is much to be positive about in these figures, the underlying picture is still one of solid yet unspectacular expansion,” said Dobson. “With euro-zone manufacturing still some 10 percent off its pre-crisis peak, it looks as if the sector still has some distance to travel before the climb back to full recovery is completed.”