Latest data released by Markit - 4 January 2021
The preliminary release can be found here. Little change to the initial reading as the final print is the highest since May 2018, with Germany carrying the bulk of the surge in manufacturing conditions in the region at the end of last year. Markit notes that:
"Eurozone manufacturing ended 2020 on an encouragingly strong note, with production growth accelerating to one of the fastest seen over the past three years. The solid performance of manufacturing amid the tightening of COVID-19 restrictions in the closing months of 2020 represents a major contrast to the lockdowns earlier in the year, with factories acting as a crucial support to the economy as the service sector is hit by tough social distancing measures.
"The strong manufacturing growth is thanks to a large extent on booming demand for German goods, which drove most of the increase in eurozone production during December, in turn buoyed by rising exports. While robust expansions were also seen in the Netherlands and Ireland, these in part reflected a temporary spike in UK demand prior to the end of the Brexit transition period.
"Employment continued to be cut, but this follows a similar pattern to the recovery from the global financial crisis, with the job market improvement coming later than the rise in production. Assuming output growth can be sustained, jobs should soon follow.
"The economy consequently looks set to be hit by the pandemic in the fourth quarter far less than the unprecedented decline in the second quarter thanks to the resilience of manufacturing, and an improvement in business expectations for 12 months ahead to the highest for almost three years suggests that momentum can be sustained in 2021. Rising virus case numbers are nevertheless likely to mean trading conditions remain challenging in the near-term and therefore constrain growth."
