The contraction in activity at the euro zone’s embattled manufacturers eased to an eight-month low in November, although a meaningful recovery still looks a long way off, a survey showed on Monday.
Markit’s Eurozone manufacturing Purchasing Managers Index (PMI) rose to 46.2 in November from October’s 45.4, though it stayed below the 50 mark dividing growth from contraction for the 16th straight month.
The figure was unchanged from the preliminary reading of two weeks ago that surpassed even the most optimistic expectations of economists polled by Reuters.
Still, the PMI pointed to little sign of an imminent turnaround and merely showed factory activity, new orders and output declining at a slower rate.
Manufacturing accounts for around a quarter of the euro zone’s private economy and is dwarfed by a services sector that fared badly in November, the data two weeks ago showed.
“The ongoing steep pace of manufacturing decline suggests that the region’s recession will have deepened in the final quarter of the year, extending into a third successive quarter,” said Chris Williamson, chief economist from survey compiler Markit.
“With official data lagging the PMI, the rate of GDP decline is likely to have gathered pace markedly on the surprisingly modest 0.1 percent decline seen in the third quarter.”
On the plus side, the manufacturing PMI seems to have bottomed out in July, suggesting things are looking a little bit brighter, Mr. Williamson added.
The new export orders index was revised up to 46.4 from the preliminary reading of 45.9 two weeks ago, and it now reads more than a full point higher than the October reading.
“Production and employment look set to fall at reduced rates in coming months as export demand slowly revives in markets such as the U.S. and Asia,” said Mr. Williamson.
The global economic looks ominous, however.
Brazil, the world’s six-largest economy by most measures, posted disappointing growth in the third quarter, suggesting emerging markets are getting dragged into the world economy’s slowdown.
The euro zone’s manufacturing output index, which feeds into Markit’s broader gauge of the economy due on Wednesday, the composite PMI, was revised up to 46.1 from 45.9, up sharply from 45.0 in October.