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Eurozone Manufacturing Up in November: Will ECB Boost Stimulus?

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Nov. 20 2020, Updated 4:43 p.m. ET

Eurozone final manufacturing PMI rose to 52.8 in November

In line with the flash estimate, the Eurozone manufacturing PMI (purchasing manufacturers’ index) rose to 52.8 in November 2015, up 0.5 points from the 52.3 reading in October.

The iShares MSCI Eurozone ETF (EZU) rose 0.3% as of December 1 after reporting strong manufacturing numbers. Daimler AG (DDAIF), STMicroelectronics NV (STM), and Volkswagen (VLKAY) were up 0.79%, 3.4%, and 9.2%, respectively, over the past month as of December 1.

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Except Greece, all Eurozone nations saw an increase in production and new orders

With the reading above the neutral level, Eurozone manufacturing has stayed above 50 for 29 consecutive months. In November, manufacturing has seen a broad-based upturn. Other than Greece, all the European countries saw a surge in new orders and production levels.

Industrial stocks Siemens (SIEGY) and Schneider Electric (SBGSY) were up 2.3% and 3.1%, respectively, over the past month as of November 30.

The improving inflows of new business and the intake of new export orders enabled the expansion of manufacturing in the Eurozone. While new export business grew in Germany, Italy, Spain, Ireland, the Netherlands, and Austria, it decreased in France and Greece.

Germany, Italy, Spain, the Netherlands, Austria, and Ireland increased their manufacturing workforces in November. On the other hand, France and Greece lowered their employment levels due to subdued order books.

Cost inflation and selling prices both decrease

Price pressures remained on the downside during November. Other than Greece, all other European nations saw input prices falling further in November. On the other hand, Greece is experiencing accelerated cost inflation. In terms of selling prices, only Germany, Ireland, and the Netherlands saw increases in selling prices.

In November, manufacturing saw a revival with an increase in order books and production levels. However, this growth is still occurring at a modest pace. To encourage this momentum, the ECB (European Central Bank) may extend its monetary stimulus at its December meeting.

Germany is one of the powerhouses in the Eurozone. In the next article, let’s look at Germany’s manufacturing numbers.

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