Eurozone PMI Manufacturing was finalized at 55.2 in December, up from November’s 53.8. That’s also the highest reading since May 2018. Markit said there were stronger rises in output and new orders signalled. But supply side shortages led to delivery delays and price rises.
Looking at some member states, Germany PMI Manufacturing rose to 34-month high at 58.3. The Netherlands rose to 27-month high at 58.2. Ireland rose to 5-month high at 57.2. Italy rose to 52.8, France rose to 51.1, Spain rose to 51.0. But Greece stayed in contraction at 46.9, despite a 2-month high.
Chris Williamson, Chief Business Economist at IHS Markit said:
“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…
The economy consequently looks set to be hit by the pandemic in the fourth quarter far less than the unprecedented decline in the second quarter thanks to the resilience of manufacturing, and an improvement in business expectations for 12 months ahead to the highest for almost three years suggests that momentum can be sustained in 2021. Rising virus case numbers are nevertheless likely to mean trading conditions remain challenging in the near-term and therefore constrain growth.”
UK PMI manufacturing finalized at 57.5, boost from last-minute Brexit preparations
UK PMI Manufacturing was finalized at 57.5 in December, up from November’s 55.6. That’s also a 37-month high. Markit said there were near-record increases in input stocks and purchasing activity. However, strong demand and transport issues stretched supply chains.
Rob Dobson, Director at IHS Markit: “The Manufacturing PMI rose to its highest level in over three years in December, mainly reflecting a boost from last-minute preparations before the end of the Brexit transition period. Customers, especially those based in the EU, brought forward purchases, boosting sales temporarily. It seems likely that this boost will reverse in the opening months of 2021, making for a weak start to the year. Note also that the December PMI data were collected prior to the border closures, which will have led to further logistics and production disruptions for many companies.”
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