- Howard Archer, chief European economist at IHS Global Insight
Euro zone manufacturing remained sluggish in December, keeping pressure on the European Central Bank to deploy fresh stimulus to underpin moribund economy. The Markit Manufacturing Purchasing Managers' Index rose to 50.6, up from November's 16-month low of 50.1. For the three months of the final quarter of 2014, the PMIs were at their lowest level since the third quarter of 2013. There were fresh evidence the Euro bloc will not soon escape a period of sticky low inflation, as manufacturers once again cut their selling prices, while their costs dropped at the sharpest pace in eight months, reflecting falling oil prices. Economists now expect Mario Draghi to announce a full-blown government bond-buying programme at its next policy meeting.
On a country-by-country basis, activity in France's manufacturing sector fell at its fastest clip in four months in December, with a Markit PMI reading coming in at 47.5. The French manufacturing sector has remained in the contraction territory since May. Italian factories also saw their performance deteriorating in the reported month, as the manufacturing PMI declined to 48.4 in December, while analysts had projected a reading of 49.5 and following November's print of 49.0. The only bright spot was German factory activity, which managed to recover in December. The corresponding index climbed to 51.2 in the final month of 2014, up from 49.5 in November.
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