Factories across the euro zone ended 2019 in poor shape with activity contracting for an 11th straight month, according to a survey which suggested the start of the new year is unlikely to see any improvement.
IHS Markit’s final manufacturing Purchasing Managers’ Index (PMI) has been below the 50 mark separating growth from contraction since February, and at 46.3 in December it was below November’s 46.9 but higher than a preliminary estimate of 45.9.
An index measuring output, which feeds into a composite PMI that is seen as a good gauge of economic health, sank to 46.1 from 47.4.
“Euro zone manufacturers reported a dire end to 2019, with output falling at a rate not exceeded since 2012,” said Chris Williamson, chief business economist at IHS Markit.
“Although firms grew somewhat more optimistic about the year ahead, a return to growth remains a long way off given that new order inflows continued to fall at one of the fastest rates seen over the past seven years.”
The index measuring new orders dipped to 46.6 from 46.7 and as they did all last year, firms turned to completing backlogs of work to stay active.
Also indicating they don’t expect an imminent improvement, purchases of raw materials were reduced and staffing levels cut.