Inflation pressure eased as less intensive factory downturn was registered across eurozone in November

According to a recent survey, there was a slowdown in manufacturing activity downturn in the euro countries in November. And while European factories are still to face difficulties as winter comes, now there exists a possibility that such difficulties would be less serious than it was expected before.

As it was evidenced by updated information, S&P Global's final manufacturing Purchasing Managers' Index (PMI) increased to the level of 47.1 in November. For comparison, its October level was 46.4. But the index value is still lower than the preliminary estimation of 47.3, and it is also below 50, or the level that separates downturn from growth.

Chief business economist at S&P Global Chris Williamson stated that the fresh PMI data indicates a less pronounced downturn in the Euro zone manufacturing activity in November. Market participants had previously feared an extremely severe downturn to hit Europe during the winter. But now, as Williamson suggests, the new data raises hopes that the region would be able to avoid it.

The registered activity is partly attributed to completing backlogs of previously placed orders, as new orders fell sharply. The decline in orders, in its turn, was caused by anticipations that there would be no quick revival in the industry. The new orders index is still below 50, although it rose to the level of 40.7, which is above October's results of 37.9.

Furthermore, certain signals of possible easing of inflationary pressures were also noted. For the officials at the European Central Bank, this will probably be good news.

Official preliminary data on inflation released on Wednesday demonstrated lower figures than it was expected. According to new data, inflation in the eurozone was 10.0% in November. But this level is still five times higher than the ECB target of 2%.