Eurozone manufacturing growth continues slowdown

By Tuba Sahin

ANKARA

The eurozone manufacturing sector's Purchasing Managers’ Index (PMI) continued its tumble to 51.8 in November, a London-based global data company said on Monday.

Posting the lowest reading since August 2016, the figure was down from 52.0 in October, IHS Markit reported.

The index signaled the continued growth slowdown of the single currency area’s manufacturing economy.

It said the weakness was centered on the investment goods sector, and added:

"Capital goods producers registered net falls in both production and new work."

The eurozone's export trade was also down for a third month running, while cost pressures remained elevated.

The report said the eurozone's so-called “big-four” economies registered the lowest manufacturing PMI readings of all countries during November.

It underlined that Italy posted a second successive monthly deterioration in manufacturing operating conditions, showing its lowest PMI reading in nearly four years.

France saw growth ease towards stagnation, while Germany saw its weakest expansion in over two-and-a-half years.

The Netherlands continued to show the highest expansion, though the pace of growth slipped to its lowest in over two years.

IHS Markit stated that sentiment about future output was near a six-year low due to concerns over trade and the future performance of the auto industry and political worries.

Chris Williamson, chief business economist at IHS Markit, said production could act as a drag on the eurozone economy in the fourth quarter.

"The darker outlook is linked to trade wars and tariffs as well as intensifying political uncertainty and has led to increased risk aversion and a commensurate cutting back on expenditure, notably for investment," Williamson said.

As a critical measurement to indicate the health of the manufacturing sector, the monthly PMI indices -- based on surveys and national data -- show growth with a value above 50 points, or contraction with a level below 50 points, compared to the previous month.