Eurozone manufacturing ends 2015 on a high, but some economists prudent

Factories in the euro area whirred into life at the end of 2015, led by activity in the likes of Ireland and Italy, the results of a widely-followed survey showed.

Markit’s manufacturing sector purchasing managers’ index for the Eurozone printed at 53.2 for the end of December, higher than November’s print of 52.8 and a preliminary reading of 53.1.

That was the highest reading since April of 2014. It was also the first time since that all the PMIs signalled growth in all of the euro area economies, Greece included.

Rob Dobson, senior economist at Markit, said the figures showed the recovery in Eurozone manufacturing was gaining further traction and that the sector contributed meaningfully to growth in the fourth quarter.

However, Dobson added that: “while there is much to be positive about in these figures, the underlying picture is still one of solid yet unspectacular expansion. With Eurozone manufacturing still some 9% 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.”

Production, new orders and new export orders all improved at the tail end of 2015, the survey compiler said.

Subindices tracking input costs and output charges both fell, but “trends in both provided further evidence of deflationary pressures easing,” Markit said.

The preliminary PMI for France was revised lower from 51.6 in November to 51.4 – which was still its best reading for 21 months.

Germany’s PMI was revised higher from 53.0 to 53.2.