Euro-Area Manufacturing Contracts for 16th Straight Month
Euro-area manufacturing output contracted for a 16th month in November, adding to signs a recession in the currency bloc may extend into next year as leaders struggle to tackle the sovereign-debt crisis.
A gauge of manufacturing in the 17-nation euro area rose to 46.2 from 45.4 in October, London-based Markit Economics said today. That’s in line with an initial estimate on Nov. 22. A reading below 50 indicates contraction.
The euro-area economy has shrunk for two successive quarters and economists foresee a further decline in gross domestic product in the final three months of the year. The Organization for Economic Cooperation and Development last week forecast contractions of 0.4 percent and 0.1 percent this year and next.
“The ongoing steep pace of manufacturing decline suggests that the region’s recession will have deepened in the final quarter of the year, extending into a third successive quarter,” Chris Williamson, Chief Economist at Markit, said in the report. “The rate of GDP decline is likely to have gathered pace markedly on the surprisingly modest 0.1 percent decline seen in the third quarter.
With euro-area unemployment at a record, economists project the region’s GDP will decrease 0.3 percent in the fourth quarter, according to the median of 25 forecasts in a Bloomberg survey.
The euro was higher against the dollar, trading at $1.3032 at 10:11 a.m. in Brussels, up 0.4 percent on the day, after reaching $1.3047 earlier.
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