Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Euro zone factory growth picked up in Nov but inflationary pressures mounted

Economic IndicatorsDec 01, 2021 04:25AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Staff wear protective masks at the Volkswagen assembly line in Wolfsburg, Germany, April 27, 2020. Swen Pfoertner/Pool via REUTERS/File Photo/File Photo

LONDON (Reuters) - Manufacturing growth in the euro zone accelerated slightly last month but supply chain bottlenecks worsened, putting a cap on output and driving the cost of raw materials up at the fastest rate in over two decades, a survey showed.

Disruptions caused by the coronavirus pandemic, alongside a shortage of heavy goods vehicle drivers, has led to product shortages and left factories struggling to get the materials they need to manufacture goods.

IHS Markit's final manufacturing Purchasing Managers' Index (PMI) nevertheless nudged up to 58.4 in November from October's 58.3, shy of an initial 58.6 "flash" estimate but still comfortably above the 50 mark separating growth from contraction.

An index measuring output, which feeds into a composite PMI due on Friday and seen as a good guide to economic health, rose to 53.8 from October's 53.3.

"A strong headline PMI reading masks just how tough business conditions are for manufacturers at the moment. Although demand remains strong, as witnessed by a further solid improvement in new order inflows, supply chains continue to deteriorate at a worrying rate," said Chris Williamson, chief business economist at IHS Markit.

Those disruptions have made it a sellers' market for raw materials and the input prices index was only just below October's record high.

But factories passed on more of those rising costs to customers and increased their prices at the fastest pace since IHS Markit began collecting the data 19 years ago. The output prices index climbed to a survey high of 73.7 from 72.6.

That suggests overall inflation https://www.reuters.com/world/europe/euro-zone-inflation-hits-record-high-likely-peak-2021-11-30 in the bloc, which preliminary official data showed on Tuesday was a record high 4.9% last month, will continue to overshoot the European Central Bank's 2.0% target.

Elevated inflation and a surge in house prices has put pressure on the ECB, which has undershot its inflation target for nearly a decade, to act.

The ECB is forecast to keep its key interest rates on hold through to end-2023 at least, a November Reuters poll https://www.reuters.com/business/euro-zone-inflation-remain-above-ecbs-target-next-year-2021-11-12 found.

Euro zone factory growth picked up in Nov but inflationary pressures mounted
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
anthony otieno
anthony otieno Dec 01, 2021 4:30AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
due to coronavirus let there be increase in vaccinating the drivers so as to increase the supply of raw material
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email