LONDON (Reuters) – The broad-based downturn in euro zone manufacturing activity eased slightly last month but the sector remained deeply rooted in contractionary territory, prompting factories to trim staffing levels for a sixth straight month.
HCOB’s final euro zone manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 44.2 in November from October’s 43.1, above a preliminary estimate of 43.8. A reading below 50 indicates a contraction in activity.
An index measuring output, which feeds into a composite PMI due on Tuesday and seen as a good gauge of economic health, climbed to 44.6 from 43.1.
“November has not been the prettiest, and this does not refer only to the weather but also to the situation in the manufacturing sector of the euro zone,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.
“Sure, almost all the sub-indices have perked up a bit. However, the improvements are mostly timid, lacking the dynamism needed to declare an upward trend,” de la Rubia said.
Sub-indices covering demand, exports, backlogs of work did all rise but remained firmly below breakeven.
Overall demand declined for a 19th month, albeit with the new orders index nudging up to 41.5 from 39.0, a six-month high. The survey suggested factory managers don’t expect a big rebound as headcount was cut again.
The employment index dropped to a low not seen since August 2020 when the COVID-19 pandemic was cementing its grip on the world.
(Reporting by Jonathan Cable; Editing by Toby Chopra)
