Manufacturing PMI in the Euro Area up to 5-month high in January
Business activity in Euro Area’s manufacturing sector accelerated in the first month of the new year 2022. The purchasing managers’ index (PMI) increased to 59 from 58 in December 2021, the flash data by IHS/Markit shows. This is also the highest level since August 2021 and the strongest jump since March 2020. The figures suggest that the manufacturing sector in the common currency block is still expanding but at a faster rate. The PMI index has a threshold level of 50, which divides contraction from expansion.
Diving deeper into the breakdowns, the input prices sub-indicator declined for the third consecutive month, falling to 83.4 in January 2022 from 87 in December 2021. If the downward trend persists, this might offer hope for cooling down of the inflation as well. The output prices sub-index, on the other hand, increased to 72.9 from 70 in the previous month, staying around 70 for roughly half a year and failing to establish a clear trend.
The suppliers’ delivery time index is recovering, inching up to 26.6 from 25.9, suggesting gradual normalisation of the supply chains because this is the third increase in a row. The sub-indicator is still far from its pre-pandemic levels, but apparently, it rebounded from a trough.
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Read more in the quarterly report Euro Area Economy in a Snapshot - Q4 2021