Eurozone manufacturing PMI ends 2020 on strong note
Activity in the eurozone manufacturing sector hit its highest level in December last year since May 2018, according to a survey released on Monday.
IHS Markit’s final eurozone manufacturing purchasing managers’ index rose to 55.2 from 53.8 in November. The reading was a touch below the initial estimate of 55.5 but still comfortably above the 50.0 level that separates contraction from expansion. It also marked the sixth consecutive reading above 50.0.
Germany was the best-performing country, with the rate of expansion the best for nearly three years. The German PMI increased to 58.3 from 57.8 in November.
Chris Williamson, chief business economist at IHS Markit, said: "Eurozone manufacturing ended 2020 on an encouragingly strong note, with production growth accelerating to one of the fastest seen over the past three years. 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 strong manufacturing growth is thanks to a large extent on booming demand for German goods, which drove most of the increase in eurozone production during December, in turn buoyed by rising exports. While robust expansions were also seen in the Netherlands and Ireland, these in part reflected a temporary spike in UK demand prior to the end of the Brexit transition period."
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said: "The PMIs remain consistent with a resilient EZ manufacturing sector in contrast to sustained weakness in services due to restrictions to keep the pandemic under control.
"What’s more, while strength in Germany still stands out, the headlines for December are slightly more balanced than in November."