Eurozone gets a lift from factory sector growth
A SPARK of good news emerged from the Eurozone’s manufacturers yesterday, while separate data from the UK showed British factories enjoying economic growth.
The latest purchasing managers’ index (PMI), compiled by Markit, showed that the Eurozone manufacturing sector’s rate of growth rose by 0.4 percentage points in January, to 51. Any figure above 50 indicates growth. The PMI improved to a six-month high in January, from 50.6 in December and 50.1 in November.
The UK’s manufacturing PMI climbed to 53 from December’s 52.7. It was boosted by growth in output and new orders.
Disappointingly, increased growth in Spain, the Netherlands and Germany was offset by miserable stats from Greece, where the sector’s rate of contraction accelerated from 49.3 to 48.3 points, a 15-month low.
Howard Archer, an economist at IHS Global Insight, said we could be seeing the effects of low oil prices and a depleted euro.
“This suggests that very low oil prices and the markedly weaker euro may just be starting to feed through to help Eurozone manufacturers, although there is still a long way to go before the sector is out of the woods. Furthermore, the European Central Bank’s stimulative measures should increasingly help matters, notably including the substantial quantitative easing programme [unveiled in January],” Archer said.