European manufacturing on the up

According to recent news data released by the Markit survey, manufacturing output in the euro zone has contracted at a slower rate in January when compared to previous months showing some signs of improvement.

The manufacturing sector rose to 34.4 points, from 33.9 in December and this represents the first improvement since August and it is hoped that the small improvement in output is a sign that the recession is easing and that the worst is over.

This is the first hint at the stability of the economy as the January manufacturing Purchasing Managers’ Index (PMI) for the euro area suggests.

However some areas have benefited more than others as manufacturing in both in Hungary and the Czech Republic has fallen faster than expected and across ex-communist central Europe has seen forecasts tumble.

Central Europe’s exposure to the vulnerable export market has meant that Hungary’s PMI has fallen by 4 points whilst the Czech PMI slumped to a record low of 31.5.

German manufacturing has contracted at its fastest pace for over 12 years during the last month, whilst in general the euro zone manufacturing has fallen with the car industry taking the biggest hit.

This has similarly been the case with the car industry in the Czech Republic which has been in demise and Finance Minister Miroslav Kalousek has said that there is likely to be a revision of the forecasted 1.4 percent growth.

Story link: European manufacturing on the up