The Eurozone manufacturing sector faced further contraction in November, marked by steep declines in factory orders, production, purchasing activities, and inventory levels, according to data released by S&P Global on Monday.
The HCOB factory Purchasing Managers' Index (PMI) dropped to 45.2 in November from 46.0 in October, indicating a more pronounced rate of decline than what has been observed during the ongoing downturn.
"This data presents a grim outlook," remarked Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank. "The persistent manufacturing recession in the Eurozone seems unending, with new orders plummeting rapidly. There's little sign of impending recovery."
Factory output decreased more swiftly, with the investment goods sector continuing as the most adversely affected. New orders saw an accelerated and significant decline, extending the downward trend in new business activity to just over two-and-a-half years. The survey revealed a continued sharp decrease in backlogs and unfinished orders, while job losses intensified at the fastest rate since August 2020.
In reaction to deteriorating demand conditions, firms scaled back on purchasing activities and pre-production inventories. Operating costs reported a third consecutive monthly drop, though the pace of decline lessened this month. This enabled companies to provide discounts, resulting in the greatest reduction in prices since August.
Despite the current downturn, manufacturers retained optimism regarding growth over the next twelve months, with sentiment reaching a three-month high. However, confidence remains low compared to historical benchmarks.
The contraction was predominantly observed in the Eurozone's three largest economies: Germany, France, and Italy. Spain, in contrast, continued its expansion, albeit at a slower rate.
Within Germany, the manufacturing sector remained deeply entrenched in contraction, with the final HCOB manufacturing PMI at 43.0, slightly below the initial estimate of 43.2.
The French manufacturing sector's downturn intensified, with the PMI slipping to 43.1 in November from 44.5 in October, against a preliminary reading of 43.2.
Italy's manufacturing sector further plunged into contraction, hindered by weak demand. The PMI fell to 44.5 from October's 46.9.
Conversely, Spain's manufacturing sector continued to grow, although at a decelerated rate, with its PMI decreasing to 53.1 in November from 54.5 in October.
Additionally, official figures released today showed that the Eurozone’s unemployment rate remained constant at a seasonally adjusted 6.3 percent in October.
The number of unemployed individuals decreased by 3,000 from the prior month, while unemployment was down 411,000 compared to the previous year.
The youth unemployment rate saw a slight increase in October but remained high, at 15.0 percent, up from September's 14.9 percent.
