The final data provided by HCOB showed that activity in the eurozone manufacturing sector increased in January, reaching a 10-month high, while factory output and new orders declining at their
softest rates since last April. In addition, business confidence edged up to a 3-month high.
Manufacturing PMI rose to 46.6 points from 44.4 points in December. However, the index remains below 50 points, which indicates a reduction in activity in the sector, since July 2022.
HCOB said that all five components of the PMI exerted a positive directional influence. Indices for new orders and output each rose to a 9-month high, but remained in contraction territory. A slower rate of deterioration was also seen in new orders from external sources, with export sales falling by the weakest margin since last April. The data also pointed to another sharp reduction in the backlog of work. Employment continued to decline in January, but the pace of contraction slowed to a 4-month low. Purchases of raw materials fell at the weakest pace since March 2023. Inventory levels declined further in January, although a softer reduction in pre-production stocks contrasted with a quicker decline in holdings of finished goods. As for the inflationary situation, input costs and output charges continued to decline in January, with rates of decrease accelerating for the first time since last July and last September respectively.