LONDON (Reuters) - Euro zone manufacturers enjoyed their best month in November since the start of 2014, a survey showed, benefiting from a weaker currency and stronger demand.
That will please policymakers at the European Central Bank, who are expected to announce an extension to their asset purchase program when they meet next week, a Reuters poll found last month [ECILT/EU].
IHS Markit’s final manufacturing Purchasing Managers’ Index for the euro zone chalked up its highest reading since January 2014 in November, registering 53.7, in line with an earlier flash estimate and ahead of October’s 53.5. Anything above 50 indicates growth.
However, a sub-index measuring output, which feeds into a composite PMI due on Monday that is seen as a good overall growth indicator, dipped to 54.1 from 54.6.
“The November survey provided firm evidence that the weaker euro is providing a meaningful stimulus to manufacturing,” said Chris Williamson, chief business economist at IHS Markit.
“While the ECB looks poised to extend its quantitative easing program at its December meeting, the upturn in growth and inflationary pressures will further fuel talk of whether we could see the ECB start tapering its asset purchases next year.”
An index measuring output prices climbed to 51.4 last month, up from October’s 50.8. The November reading was the highest in more than five years.
Euro zone inflation inched up another tenth of a percentage point in November, official data showed on Wednesday. Consumer prices rose 0.6 percent year-on-year, still well below the ECB’s target of close to but below 2 percent.
Reporting by Jonathan Cable, editing by Larry King