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EZ Manufacturing ENG 1201 PR (2)

EZ Manufacturing ENG 1201 PR (2)

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Published by Kostas Georgioy

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Categories:Business/Law, Finance
Published by: Kostas Georgioy on Jan 03, 2012
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01/03/2012

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News Release
Purchasing Managers’ Index
 ® 
MARKET SENSITIVE INFORMATION
EMBARGOED UNTIL: 09:00 (UK Time), 2 January 2012
Markit Eurozone Manufacturing PMI
 ® 
– final data
Manufacturing growth in Q4 2011 weakest since mid-2009
Data collected 5–15 December. 
 Final Manufacturing PMI at 46.9 in December
 Levels of production and new orders fall acrossall nations for second month running
 Subdued price and supply-chain pressures
Manufacturing PMI
 ® 
(overall business conditions)
30354045505560651998200020022004200620082010Eurozone PMI
 ® 
, 50 = no change in business conditions on monthSource: Markit
 
The downturn in the Eurozone manufacturingsector extended into a fifth successive month inDecember, as companies faced declining orderinflows, a slowing global economy and ongoingfinancial market turbulence.At 46.9 in December, unchanged from the earlierflash estimate, the
Markit EurozoneManufacturing PMI
 ® 
was up marginally fromNovember’s 28-month low of 46.4 to signal a slighteasing in the overall rate of contraction. Theaverage PMI reading in Q4 2011 was neverthelessthe weakest since the second quarter of 2009.
Countries ranked by Manufacturing PMI
 ® 
(Dec.)
 
Austria49.04-month high  France48.94-month highGermany48.42-month highNetherlands46.22-month highItaly44.33-month highSpain43.7 3-month low Greece42.03-month high
Production declined for the fifth successive month.The fall was less sharp than the 29-month recordseen in November, though it remained steepcompared with previous downturns prior to thefinancial crisis. Output and new business fell acrossthe consumer, investment and intermediate goodssectors, with the latter reporting the strongestdeclines in both cases.
Manufacturing output
102030405060'98'99'00'01'02'03'04'05'06'07'08'09'10'11-10-8-6-4-202Eurozone Manufacturing PMI Output IndexManufacturing outputPMIEurostat manufacturing output, 3m/3m % change
Sources: Markit, Eurostat via Ecowin.
 
For the second consecutive month, all of thenations covered by the survey reported lower levelsof output. Rates of contraction for production easedacross all of the nations covered, although markeddisparities persisted. Germany, France, theNetherlands and Austria all saw only mild falls,while marked contractions were seen in Italy, Spainand Greece.The fall in production at euro area manufacturersreflected a seventh successive monthly decline innew orders received, which in turn reflected acombination of lower demand in domestic marketsand reduced international trade. The rates ofdecline in both total new orders and new exportorders were less marked than in November but
Page 1 of 3
 
 © Markit Economics Limited 2012
 
 
 
remained severe, with the last three months seeingthe greatest decline in demand for manufacturedgoods since the second quarter of 2009.In all countries covered, the contractions in bothnew orders and new export orders were steep bythe historical standards of the survey. Greece, Italyand Spain saw the steepest overall falls in neworders.
Job cuts continue as firms cut capacity
New orders fell at steeper rates than output in allcountries, as goods producers cut their backlogs ofexisting orders. Outstanding work fell for theseventh month running, dropping at the same rateas in the previous two months. The final quartersaw the fastest depletion of order book backlogs fortwo-and-a-half years. All countries saw sharp fallsin backlogs except France, where only a marginaldecline was reported.Manufacturers remained cost-cautious and worriedabout over-capacity as a result of the ongoingdownturn in new orders, causing employment to fallslightly for the second straight month. Increases inheadcounts in Germany, France and Austria wereoffset by job cuts elsewhere.
Manufacturing employment by country
25.030.035.040.045.050.055.060.065.0200920102011GermanyFranceItalySpainNetherlandsGreecePMI Manufacturing Employment, 50 = no change on monthSource: Markit
 
Input prices fall
Input prices fell for the third straight month, withdeclines reported in Germany, France, Spain, theNetherlands and Austria. Meanwhile,manufacturers’ output prices rose only verymodestly on average across the Eurozone, and fellin Spain and Greece.Manufacturers’ input volumes fell for the sixthstraight month, while inventories of raw materialsand finished goods showed the largest falls sinceDecember 2009 and October 2010 respectively.
Comment:
 
Chris Williamson, Chief Economist at Markit
said:
“Eurozone manufacturing is clearly undergoing another recession. Despite the rate of decline easing slightly in December, production appears to have been collapsing across the single currency area at a quarterly rate of approximately 1.5% in the final quarter of 2011.“The survey also points to a strong likelihood of further declines in the first quarter of the new year,with producers cutting back headcounts, inventories and purchasing.“Worryingly, new orders are falling at a far faster rate than manufacturers have been cutting output,meaning firms have been reliant on orders placed earlier in the year to sustain current production levels. This is particularly evident in Germany, and suggests that operating capacity will be slashed in coming months unless demand revives.” 
-Ends-
Page 2 of 3
 
 © Markit Economics Limited 2012
 

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