Eurozone Manufacturing Growth Nears Three-Year High

02 December 2003

The Reuters Eurozone Manufacturing Purchasing Managers Index rose from 51.3 in October to 52.2 in November, indicating an improvement in manufacturing business conditions for the third month in a row -- the best since February 2001.

The PMI is based on information provided by around 3,000 manufacturers across the Eurozone (Austria, France, Germany, Greece, Ireland, Italy, The Netherlands and Spain) -- the eight largest European economies accounting for an estimated 92% of all Eurozone manufacturing activity

Seasonally adjusted key indicators from the report, published Tuesday and produced for Reuters by NTC Research in conjunction with the European Council of Purchasing and Supply, are as follows ...

Manufacturing Output
The Manufacturing Output Index rose to 54.4 in November from 53.1 in October, registering the third consecutive monthly rise in production and the fastest rate of growth since January 2001. Output growth accelerated in all countries surveyed except Germany (where growth dipped from October’s near three year high, largely as a result of capacity constraints), and Greece (where output fell).

New Orders
The New Orders Index increased from 53.2 in October to 55.0 in November, signalling the strongest monthly rise in new orders for thirty-seven months. New orders have now risen for four consecutive months, with the rate of increase accelerating over this period.

Manufacturing employment in the euro area continued to fall in November as firms cut costs. The Employment Index rose from 47.9 in October to 48.5. Employment has in fact now fallen continuously over the last two-and-a-half years, but the rate of job losses slowed in November to the weakest since July 2002. Employment rose in Italy, Ireland and Austria, but fell in Germany, France, Spain, the Netherlands and Greece.

Raw Materials
The amount of raw materials purchased by manufacturers rose for the second successive month in November, rising at the fastest rate for three years. Purchases rose in all countries surveyed except Greece as increasing numbers of manufacturers reported the need to rebuild inventory levels to meet higher production requirements.

Input Prices
At 52.9, up from 52.3 in October, the Input Prices Index signalled only modest overall growth of input costs. These rose for the second consecutive month in November, having fallen throughout the five months to September.

PMI questions are asked about real events and are not opinion based. Data are presented in the form of diffusion indices, where an index reading above 50.0 indicates an increase in the variable since the previous month, and below 50.0 a decrease.

Data sourced from: NTC Research; additional content by WARC staff