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Eurozone manufacturing shrinks in December
January 03, 2013
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BRUSSELS: Eurozone manufacturing activity contracted for a 17th month running in December, a key survey of business managers showed on Wednesday.

The Purchasing Managers Index (PMI) for the manufacturing sector, a leading indicator compiled by the Markit research firm, came in at 46.1 points in November, down from an earlier estimate of 46.3 points and down from November’s 46.2 points.

Any score below 50 points indicates contraction, not growth.

Ireland, as has frequently been the case in recent months, posted a score of 51.4 points, indicating growth.

But Germany (46.0 points), France (44.6) and Italy (46.7) were all signalling contraction.

While manufacturing activity “may have suffered its worst contraction around October,” said London-based IHS Global Insight analyst, “the December purchasing managers’ surveys indicate that the sector is still stranded well into recessionary territory.”

FRENCH AUTO

New car registrations in France hit a 15-year low point in 2012 and business in 2013 looks like being just as difficult, data from the French automobile manufacturers’ association CCFA showed on Wednesday.

Sales in 2012 fell by 13.9 per cent from the level the previous year to 1.899 million units, a CCFA statement said. The drop was compounded by the end of government-funded buying schemes that had boosted sales between 2009 and early 2011.

The worst hit were French automakers Peugeot Citroen, where sales shrank by 17.5 per cent, and Renault, down by 22 per cent.

Foreign builders saw an overall drop of 6.7 per cent, but sales by German luxury car companies Audi, BMW and Mercedes-Benz actually grew.

“All the multi-range car companies shrank, while higher end carmakers held on,” a spokesman at CCFA said.

ASIA’S REVIVAL

Manufacturing activity in Asia expanded in December as China’s economy showed signs of revival but export demand was uneven, pointing to further sluggish growth for the region, business surveys suggest.

Private and official manufacturing surveys added to evidence that China’s economy picked up late in the year, while activity in India expanded at its strongest pace in six months in December, boosted by strong factory output and a spike in new orders.

Similar reports on Wednesday also showed activity increased in South Korea and Taiwan for the first time since May.

But while domestic orders showed some improvement, export orders were decidedly mixed, pointing to continued weakness in global demand with Europe mired in recession and fears of tighter fiscal policy clouding recovery prospects in the United States. South Korean exports unexpectedly fell in December, according to data on Tuesday, highlighting that any recovery for export-reliant Asian economies is likely to be patchy and slow.

 “Asia is gradually improving, but the region, including China, remains largely exposed to exports and without signs of improvement in the US and Europe it will be hard for activity to take off,” said Frederic Neumann, co-head of Asian economics at HSBC.

Agencies
 

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