Markit's Eurozone Manufacturing Purchasing Managers Index (PMI) posted 54.9 points in December last year, up from November’s 53.7 points and unchanged from the earlier flash estimate.
Underlying the improved performance of the euro zone manufacturing sector was faster growth of production and new orders. Rates of expansion of both were either at, or close to, the steepest since early 2011.
Companies reported improved levels of new work received from both domestic and non-domestic clients. New export business rose at the second quickest pace since April 2011, bettered only during this sequence by that achieved at the start of 2014.
“Euro zone manufacturers are entering 2017 on a strong footing, having ended 2016 with a surge in production. Much of the upturn in demand and the rise in price pressures is attributable to the depreciation of the euro, which companies often cited as making exports more competitively priced but also hiking import prices, exacerbating rising global prices for commodities such as oil,” stated Chris Williamson, chief economist at IHS Markit. “Our expectation that euro zone economic growth will slow slightly in 2017, down from 1.7 percent in 2016 to 1.4 percent,” he added.