IHS Markit: Eurozone Manufacturing Activity at an All-Time High in Survey’s 20-Year History

Manufacturing activity in Europe expanded at the fastest pace since the survey was founded in June 1997, with the IHS Markit Flash Eurozone Manufacturing PMI rising from 60.1 in November to 60.6 in December. As such, this is yet another signal that the economy on the continent is trending in the right direction after sluggishness in recent years. New orders (up from 61.4 to 61.6), output (up from 61.0 to 62.0) and employment (up from 58.2 to 58.5) each accelerated in December, with hiring and production growth also at record highs. The pace of new orders registered the best reading since April 2000. Exports eased ever so marginally in the latest data (down from 60.7 to 60.6) but continued to expand robustly. At the same time, the index for future output continued to grow at a very healthy pace (up from 65.6 to 67.8), rising to its highest point since that measure was introduced in mid-2012.

In addition to data for Europe as a whole, IHS Markit also released preliminary figures for France (up from 57.7 to 59.3) and Germany (up from 62.5 to 63.3). German manufacturing activity expanded at its best rate since the survey began in April 1996, and the data in France saw the strongest growth since September 2000.

Meanwhile, the IHS Markit Flash U.S. Manufacturing PMI increased from 53.9 in November to 55.0 in December, its highest point since January. Overall, manufacturing activity in the United States continued to expand modestly, with decent increases in growth for new orders (up from 54.3 to 55.9), output (up from 54.3 to 55.7) and employment (up from 54.3 to 55.7). The rate of hiring grew at the fastest pace since October 2014. At the same time, export growth (down from 52.0 to 50.6) slowed despite expanding for the fourth straight month. Looking ahead, the index for future output jumped to its best reading since January 2016 (up from 70.8 to 71.1), with respondents very optimistic about production for the next six months.

Final data on each of these surveys will be released on January 2.

Chad Moutray

Chad Moutray

Chad Moutray is chief economist for the National Association of Manufacturers (NAM) and the Director of the Center for Manufacturing Research for The Manufacturing Institute, where he serves as the NAM’s economic forecaster and spokesperson on economic issues. He frequently comments on current economic conditions for manufacturers through professional presentations and media interviews. He has appeared on Bloomberg, CNBC, C-SPAN, Fox Business and Fox News, among other news outlets.
Chad Moutray

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