Italy and Greece surprise as the Eurozone reports strong manufacturing data

Production, exports and new orders all increased during December

The Eurozone's manufacturing sector ended 2015 on a positive note as it registered an overall score of 53.2 in the Markit Manufacturing Purchasing Managers’ Index in December.

This was marginally ahead of an estimated reading of 53.1 and up from 52.8 in November - any figure above 50 indicates expansion.

Italy's figures ran well ahead of forecasts, with a score of 55.6 - that was the country's best result in almost 5 years.

Ireland's manufacturing sector has continued to perform well, with a reading of 54.2, this was a 5 month high.

Data from Greece shows that manufacturing is growing in the country for the first time in 12 months - its manufacturing PMI was 50.2, its highest value in 19 months.

 

"December data signalled the steepest rise in eurozone manufacturing production since April 2014, as output was driven higher by faster inflows of total new orders," the Markit report says.

This expansion comes as euro values remain low making Eurozone products relatively cheaper when compared to the US and UK. New export orders increased in Germany, France, Italy, Spain, the Netherlands and Ireland, although they did fall in Austria and Greece.

Rob Dobson, Senior Economist at Markit commented on the figures: "The end of 2015 saw the eurozone manufacturing recovery gain further traction, with rates of expansion in production and new orders over the final quarter besting those of quarter three.

"The sector is therefore likely to make a meaningful positive contribution to the euro GDP numbers for quarter four," he said.

Markit economist, Samuel Agass who worked on compiling the Greek Manufacturing PMI survey, welcomed the country's return to growth - but added a note of caution saying, "the manufacturing economy is still a long way from a full recovery.

"Incoming new orders are still contracting, from both domestic and foreign markets, and input stocks have depleted further."

He continues to say that the economy is showing "solid progress," and that it is moving away from the "precarious" position that it found itself in during the country's prolonged period of negotiations with its international creditors during the first half of 2015.