Eurozone’s manufacturing PMI sees slight rebound in Nov 2023

Eurozone’s manufacturing PMI, compiled by S&P Global for Hamburg Commercial Bank (HCOB), remained below the 50 growth threshold for the seventeenth consecutive month in November, indicating a continued decline in the goods-producing sector. However, there was a slight improvement, with the index rising to 44.2 from October’s 43.1, marking the highest reading since May and suggesting a less severe deterioration in manufacturing conditions.

Of the eight nations included in the HCOB eurozone manufacturing PMI, six recorded in contraction territory. Austria was the worst performer in November, closely followed by Germany and France. All three countries recorded softer rates of decline, however, and this was also the case in the Netherlands and Spain. By contrast, Italy’s manufacturing downturn intensified. Two nations bucked the wider trend of contraction during November—Greece and Ireland—with the former seeing growth improve to a three-month high. Ireland’s manufacturing economy stabilised after back-to-back months of decline.

The Eurozone manufacturing PMI, compiled by S&P Global for HCOB, remained below the growth threshold in November 2023, marking continuous contraction.
Austria, Germany, and France showed slight improvements, while Italy worsened.
Greece and Ireland saw growth, but overall, the sector faced reduced production, inventory levels, and staffing.

Factory production across the euro area continued to decrease during November. That said, while the pace of decline was strong overall, it eased to its softest since May. A slower fall in output coincided with a weaker contraction in new orders, and the slump in new export sales (which has been ongoing since March 2022) also moderated, as per S&P Global.

Eurozone manufacturers were less aggressive with their destocking efforts, November survey data showed, with pre- and postproduction inventory levels falling at weaker rates. The fall in stocks of purchases was nevertheless the second-fastest seen since December 2012 amid another substantial month-on-month reduction in manufacturers’ buying activity.

Backlogs of work declined in November, extending the current period of depletion in outstanding business to a year-and-a-half. Lower volumes of incomplete orders, in tandem with a continued and marked deterioration in demand, led eurozone manufacturers to reduce their staffing capacity for a sixth month in a row midway through the fourth quarter. Furthermore, the rate of job shedding was the fastest since August 2020. That said, although employment cuts worsened, there was a pick-up in business confidence during November, with growth expectations at their strongest for three months.

Meanwhile, suppliers’ delivery times shortened for the tenth month in succession during November. The extent to which vendor performance improved was solid, but considerably softer than those seen on average in the first half of the year.

Fibre2Fashion News Desk (DP)