Eurozone factory growth picks up in November but price pressures mount - IHS Markit

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Eurozone factory growth picks up in November but price pressures mount - IHS Markit

On Wednesday, data from IHS Markit, the London-based financial information provider, unfurled that the eurozone’s factory activity had perked up in November, however, an ongoing supply chain woe had exacerbated further what in effect had crippled output while pushing raw materials’ prices higher at the steepest pace in more than two decades.

The bloc’s common currency euro, shared among 19 eurozone member states, remained almost unchanged at $1.1330 followed by the release of IHS Markit data, while equity markets feathered up with Frankfurt’s DAX opening up 1.41 per cent higher to 15,355.90.

French CAC 40 gained 1.33 per cent to 6,825.10 in morning European trading hour, while London’s blue-chip FTSE 100 opened 1.18 per cent higher to 7,160.30. Although eurozone factory activity in November came in better-than-anticipated, several analysts were saying followed by IHS Markit data that prospects of further tailwinds in upside growth momentum might be offset by pandemic-induced disruptions in supply chains, while a chronic lack of drivers of heavy vehicles had accelerated raw materials’ shortages in factories.

Meanwhile, citing that a higher demand of consumer goods appeared to be propelling eurozone manufacturing activity higher despite a scorching rise in inflation indicators, a chief business economist at IHS Markit, Chris Williamson said, “A strong headline PMI reading masks just how tough business conditions are for manufacturers at the moment.

Although demand remains strong, as witnessed by a further solid improvement in new order inflows, supply chains continue to deteriorate at a worrying rate”.

Eurozone factory activity steps up in November

Citing statistics, according to the London-based financial information provider, IHS Markit’s final manufacturing PMI (Purchasing Managers’ Index) edged higher to 58.4 last month, hovering comfortably above a 50.0 mark that separates growth from contraction.

Besides, an IHS Markit gauge that measures factory output, widely contemplated as a good indicator to a positive economic health, surged to 53.8 from an October reading of 53.3.