Written on February 2, 2010
Expansion in Europe’s manufacturing industry accelerated to the fastest pace in two years in January as reviving global demand prompted companies to step up output.
An index of manufacturing in the 16-nation euro region increased to 52.4 from 51.6 in December, London-based Markit Economics said today. That’s the highest since January 2008 and above an initial estimate of 52 published on Jan. 21. The gauge is based on a survey of purchasing managers and a reading above 50 indicates expansion.
European companies are increasing production as a global economic recovery spurs exports. Manufacturing in the U.S., the world’s largest economy, grew last month at the fastest pace since August 2004, while China sustained its manufacturing expansion, separate reports showed today.
“Manufacturers took the biggest hit and are now catching up,” said Christoph Weil, a senior economist at Commerzbank AG in Frankfurt. “The recovery will continue for another couple of months.”
In the U.S., the Institute for Supply Management’s factory index rose to 58.4, exceeding the highest estimate in a Bloomberg News survey of economists, figures from the Tempe, Arizona-based group showed. A separate report showed U.S. personal spending rose 0.2 percent in December, the third straight gain.
The euro rose after the European manufacturing report, trading at $1.3904 at 5:12 p.m. in London, compared with $1.3863 on Jan. 29. The single currency has shed 2.9 percent against the dollar so far this year.
Germany’s Bayerische Motoren Werke AG, the world’s biggest maker of luxury cars, said on Jan. 29 that it expects full-year earnings to rise.
A gauge of services in the euro-area economy fell to 52.3 last month from 53.6 in December and a composite index of the manufacturing and service industries declined to 53.6 from 54.2, according to Markit’s initial estimate released last month. Markit is scheduled to publish the final report for January on Feb. 3.
Filed in: money.