Euro zone factory activity to fall sharply by end of 2024

Euro zone manufacturing ended 2024 on a weak note, with factory activity falling at a faster pace, a survey showed, offering little sign of an imminent recovery.

The downward trend was broad-based again, with the bloc’s three biggest economies, Germany, France and Italy, all in industrial recession. Spain bucked the trend, however, with manufacturing expanding strongly.

S&P’s Hamburg Composite Purchasing Managers’ Index, seen as a good gauge of the overall state of the economy, fell to 45.1 in December, below initial expectations and well below the 50-point mark that separates growth from contraction, according to Reuters.

The index reading came in at 45.2 in November, and the headline reading has remained below 50 since mid-2022.

An index measuring output, which feeds into the composite PMI due on Monday and is seen as a good guide to economic health, fell to 44.3 from 45.1 in November.

An index measuring new orders fell well below breakeven, hitting a three-month low, while a gauge of backlogs of work fell to 42 from 42.9, suggesting activity is largely limited to meeting existing orders.