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LONDON (Reuters) – Eurozone factories finished 2023 weaker, survey showed, with production activity contracting for the 18th straight month in December, pointing to an impending strong recovery in an economy likely to slip into recession. Signs proved scant.
The final HCOB Eurozone Manufacturing Purchasing Managers Index (PMI) compiled by S&P Global was 44.4 in December, slightly up from 44.2 in November, but it still marks the difference between expansion and contraction in activity. It was well below 50.
The preliminary figures were unchanged from November.
The index, which measures output and is reflected in the composite PMI to be released on Thursday and is considered a good indicator of the health of the economy, fell to 44.4 from November’s final reading of 44.6, but was above the preliminary reading of 44.1. Ta.
Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said the pessimistic trend strongly points to a contraction in euro area GDP last quarter. The region’s economy contracted by 0.1% in the third quarter, according to official data, so the contraction in the second quarter would meet the definition of a recession.
“Amid an unrelenting downturn in eurozone manufacturing, HCOB PMI showed little improvement compared to November. It would mean it was in,” Della Rubia said.
The 20-nation eurozone is expected to endure a short and shallow winter recession, according to a Reuters poll in early December.
The continued decline in new orders eased slightly last month, but remains below 50, similar to all of 2023. The sub-index rose from 41.5 to 42.0.
“The decline in new orders reflects the dark clouds, and we are retreating at roughly the same pace as last month,” Dell’Albia added.
Most of December’s activity was generated by the completion of old orders, the work backlog index shows, and manufacturers do not expect a seventh consecutive month of factory layoffs to be imminent. It suggests.
(Reporting by Jonathan Cable; Editing by Susan Fenton)
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