The downturn in the euro zone manufacturing sector eased at the start of 2013, as rates of decline in production and new orders both slowed, according to the Markit Eurozone Manufacturing PMI report. Markit's Eurozone Manufacturing Purchasing Managers Index (PMI) rose to its highest level for 11 months to 47.9 points in January, up from December's 46.1 points and also slightly above the earlier flash estimate of 47.5. However, the Markit Final Eurozone Manufacturing PMI was below the neutral 50 points, signalling a continuation of the contraction which has lasted for one-and-a-half years.
In the two biggest euro zone economies, a welcome return to output growth in Germany contrasted with deepening recession in France. France was the only nation to see its PMI both below 50.0 and decline from the December level.
Manufacturing output in the euro area contracted for the 11th successive month in January, although the rate of decline was the weakest since March 2012, which marked the start of the sequence. The downturns in new orders and new export orders also eased sharply.
Chris Williamson, chief economist at Markit, said, " The euro zone economic picture continues to brighten. The improvement was led by Germany, which saw the strongest gain in output of all euro zone states, but rising exports are also helping to revive the manufacturing sectors of other countries, most notably Spain and Italy."
"While the industrial sector looks likely to have acted as a drag on the euro zone economy in the final quarter of last year, deepening the double-dip downturn, the PMI provides hope that the first quarter could mark the start of a turnaround. Providing there are no further setbacks to the region's debt crisis, these data add to the expectation that the euro zone is on course to return to growth by mid-2013," Mr. Williamson stated.