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HCOB's final euro zone manufacturing Purchasing Managers' Index
(PMI), compiled by S&P Global, did nudge up to 44.4 in December
from November's 44.2 but remained firmly below the 50 mark
separating growth in activity from contraction.
A preliminary estimate was for no change from November.
An index measuring output, which feeds into a composite PMI due
on Thursday and seen as a good gauge of economic health, dipped
to 44.4 from November's final reading of 44.6 but was ahead of
the 44.1 flash estimate.
The pessimistic trend strongly pointed to a contraction in euro
zone GDP last quarter, Hamburg Commercial Bank's chief economist
Cyrus de la Rubia said. The bloc's economy contracted 0.1% in
the third quarter, official data has shown, so a second quarter
of contraction would meet the definition of recession.
"Amid a relentless slump in the manufacturing sector of the euro
zone, the HCOB PMI has shown little improvement compared to
November. It paints a bleak picture for the euro zone and would
mean that the euro zone entered a recession in the third
quarter," de la Rubia said.
The 20-country euro zone will endure a short and shallow winter
recession, an early December Reuters poll found.
An ongoing decline in new orders did ease moderately last month
but remained below 50, as it was for all of 2023. The sub-index
rose to 42.0 from 41.5.
"The sluggishness of new orders echoes the gloom, retreating
almost as swiftly as the previous month," added de la Rubia.
A chunk of December's activity was generated by completing old
orders, the backlogs of work index showed, and suggesting that
manufacturers don't expect an imminent turnaround factories cut
headcount for a seventh consecutive month.
(Reporting by Jonathan Cable; Editing by Susan Fenton)
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