The December 2021 purchasing managers’ index (PMI) data by London-based IHS Markit showed a further easing of the supply chain crisis in the eurozone as average lead times lengthened to the softest extent since February. However, despite alleviating pressures on supply chains, manufacturing sector conditions continued to disappoint, with output growth remaining unchanged from that seen during November 2021.

The company’s eurozone manufacturing PMI fell to 58 during December, down from 58.4 in November and its lowest reading in ten months.

Firms took advantage of the relative gain and added purchases to their inventories at the fastest rate ever recorded by the survey, outpacing the previous record set in November by a notable margin, IHS Markit said.

Meanwhile, rates of input cost and output price inflation eased, but remained among the fastest ever seen by the survey.

Sector data revealed that consumer goods makers drove the slower improvement in manufacturing conditions, with intermediate and capital goods producers registering marginally quicker upturns.

Survey data split by country showed Italy once again leading broad euro area manufacturing growth, despite the expansion slowing there. At the other end of the scale, France’s goods-producing sector remained the weakest-growing of the eight monitored eurozone nations.

The highlight of the December survey centred on supplier performance, with the latest data showing average input lead times lengthening to the weakest extent since February. Times lengthened to lesser degrees in all monitored euro area countries except Italy.

In turn, eurozone manufacturers increased their purchases of raw materials and other semi-finished items at a sharp pace. The combination of these two factors enabled firms to stockpile inputs, with inventories rising at a rate which was unparalleled in over 24 years of data collection.

Despite a record surge in pre-production stocks, manufacturing output growth remained unchanged from November, which saw the second weakest since the sector began its recovery in July 2020. Many firms continued to feel the impact of shortages at suppliers, while others noted subdued demand pressures.

Fibre2Fashion News Desk (DS)

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