European Manufacturers Excel in December
New economic data indicate that the eurozone’s recovery will finish the year on a high note, Reuters reports.
According to Markit’s compilation of the eurozone’s Purchasing Managers’ Index, flash data from the month of December suggest it will be a good end to a year that has been marked by ups and downs. The composite flash value for December is 52.1, up from last month’s 51.7. As any value above 50 indicates an expansion, this means that overall, economic activity will grow at a better pace in December.
One of the components of the composite value, the manufacturing sector PMI, will perform admirably this month, finishing with a score of 52.7. This is a significant increase from last month’s value of 51.6, beating out most analyst expectations, which predicted a modest increase in December.
However, the services sector is not expected to enjoy the same success as its manufacturing counterpart. The flash value for that area comes in at 51, slightly down from November’s 51.2. A decline in the services sector is troubling because it indicates that consumerism is not truly thriving in the region. It is one thing to say that European producers are back in business; it is another thing to say that European consumers are back to pre-crisis levels of spending. This is especially true when everyone is afraid that the consumers simply don’t have the wealth to drive an economic recovery in the eurozone until employment levels start to pick up.