As markets reopen from the New Year break the Eurozone was dealt its first blow for 2013.
According to Markit Economics, manufacturing output in the 17-nation currency bloc shrank by more than previously estimated in December.
Markit’s gauge of manufacturing gave an initial reading of 46.3 two weeks into December. Today’s reading has shown the actual figure to be 46.1.
That’s 0.1 lower than November’s level and 3.9 below the 50 mark which separates growth from contraction.
Although Italian manufacturing came in at 46.7 and a nine-month high it wasn’t enough to counteract the declines, including Germany’s two-month low.
A report which accompanied the index stated that: ‘Ireland was the only nation to report improved operating conditions. Downturns accelerated in Germany, Spain, Austria and Greece, but eased in France, Italy and the Netherlands. Greece remained bottom of the PMI league table, still well adrift of the next-weakest performing nations France and Spain. Eurozone manufacturing production declined for the tenth successive month in December, as companies were hit by reduced inflows of both total news orders and incoming new export business.’
It wasn’t all bad news however as the report did go on to assert that ‘over Q4 2012 as a whole, the average rates of decline in both output and new orders were the slowest since the opening quarter of the year.’
Meanwhile, Markit’s chief economist Chris Williamson commented: ‘The euro-zone manufacturing sector remained entrenched in a steep downturn at the end of the year. The region’s recession therefore looks likely to have deepened, possibly quite significantly, in the final quarter.’
After two consecutive quarters of contraction, and with industry experts foreseeing contraction not only in the fourth quarter of 2012 but in the first quarter of 2013, the situation in the Eurozone appears unlikely to improve significantly anytime soon.
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As of 10:00 am
The Pound to Euro exchange rate is currently trading at 1.2297
The Pound to US Dollar exchange rate is currently trading at 1.6319
The Pound to Australian Dollar exchange rate is currently trading at 1.5553
The Euro to US Dollar exchange rate is currently trading at 1.3263
The Euro to Pound exchange rate is currently trading at 0.8125
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