Agencies
Manufacturing activity fell sharply across Europe last month and a further decline in demand dashed hopes for an imminent turnaround, whereas in China, factories extended their recovery, surveys showed.
China’s upswing was driven in part by Beijing’s stimulus measures and a rush to export ahead of proposed tariffs by U.S. President-elect Donald Trump, who will return to the White House in January.
Trump’s tariffs would also have a significant impact on an already struggling eurozone economy.
HCOB’s final eurozone manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, sank to 45.2 in November, matching a preliminary estimate and further below the 50 mark separating growth from contraction.
In October, it was 46.0 and the headline reading has been sub-50 since mid-2022.
Manufacturing activity in Germany, Europe’s largest economy, remained firmly entrenched in contractionary territory, while France saw the steepest decline in new orders since the first wave of the COVID-19 pandemic in 2020.
In Britain, outside the European Union, its PMI pointed to the sharpest contraction in nine months, as orders from domestic and foreign customers fell.
S&P cited headwinds from a 25 billion pound ($32 billion) rise in employment taxes in the new Labour government’s Oct. 30 budget, a 7% increase in Britain’s minimum wage, disruption to shipping in the Red Sea and the threat of global goods tariffs.
“The UK follows the weaker results also shown in the European PMI data, and shows that across both the U.K. and eurozone, manufacturers are really feeling the downturn,” said Cara Haffey at PwC.
