November growth of eurozone pmi surprising since Omicron
Eurozone business growth unexpectedly accelerated last month. As consumers shrugged off the latest wave of coronavirus infection and new restrictions, while price pressures soared again, a recent survey found that the growth in the eurozone was even stronger than expected.
The eurozone economy has improved in November, thanks to strong industrial output. The IHS Markit’s Flash Composite Purchasing Managers’ Index, a good indicator of overall economic health, jumped to 55.8 in November from 54.2 in October.
According to Reuters, the 10th consecutive reading above 50 surprised pollsters and economists. This means that Europe’s economy is finally picking up, according to the pmi index.
Data released by Markit, an information and analytics company, show that growth in the eurozone is beating expectations due to an increase in activity for November. However, some analysts are concerned that the country will suffer negative economic effects due to growing infections of influenza A (H3N2).
Faced with supply bottlenecks caused by the pandemic, alongside a shortage of heavy goods vehicle drivers, traders are able to “squeeze” more profit from raw materials. The usage index reached 75.9 for the first time since 1998’s survey began, due to its combination of heavy machinery coupled to machinery inputs.
European PMI outlook is looking more promising- except for Greece
However, the PMI for the bloc’s dominant services industry rose to 56.6, well above all predictions of a drop to 53.5 in the Reuters poll that predicted this fall.
However, when looking at each country in isolation, it is clear that the european economy is not all slowly contracting.
Factory production maintained a robust level, as seen alongside an increase in output revealed by the manufacturing PMI.
Demand remained strong and factories were able to pass on some of the record increase in raw material costs to customers – with prices indexing being higher than in any other year throughout IHS Markit’s data collection.
However, the growth may be surprising to some since Eurozone markets are grappling with inflation levels. Recent data shows that the uptick in the EU’s PMI index is concerning for many as it could create tension on ECB meeting minutes.
After a recent pmi in the eurozone, the failure to rise up with Omicron’s predictions is ultimately not a surprise. With supply delays remaining close to record heights and energy prices spiking higher, more pressure has been put on prices which were closer to making the predictions than before.