Markit PMI: Eurozone economy picks up a bit of momentum in November

Chris Williamson, chief economist at Markit, described Thursday’s figures as a “welcome upturn” after similar surveys this week showed slower growth in the construction and manufacturing sectors.

Growth of United Kingdom housebuilding activity slowed in November to its weakest pace since June 2013. Aside from the pre-election slowdown seen in April, overall output growth was the weakest since mid-2013. The overall rate of job creation nevertheless remained resiliently robust despite widespread reports of difficulties finding suitable staff and worries about the introduction of the National Living Wage, in turn leading to reports of rising wages.

More than half of the 170 construction purchasing executives surveyed (55 per cent) remained upbeat, forecasting a rise in output over the year ahead, while only 5 per cent anticipated a fall.

Martin Beck, senior economic advisor to the EY ITEM Club, said: ‘Alongside equally subdued evidence of inflation among manufacturers and builders, there is little reason to think that the MPC will be swayed by November’s activity surveys when it announces its next policy decision on 10 December.

Rob Dobson, of Markit, said: “If this mix of subdued growth and weak price pressures is reflected in other sections of the economy, the Bank of England will have further cause to push any potential rate increase into the spring of 2016”.

Sterling fell to 7-1/2-month lows against the dollar this week, dented in part by those surveys as well as growing signs that the Federal Reserve will raise US interest rates this month.

Eurozone data today showed business growth in the region accelerated slightly in November, but firms cut prices again in November, with the ECB’s 2 per cent inflation target ceiling remaining distant.

Analysts at data provider Markit, which carries out the survey, also pointed out that prices are falling at one of the fastest rates in the survey’s 24-year history, as declining global commodity costs feed through the supply chain.

Commercial construction activity topped the growth table, but the latest expansion was less marked than October’s eight-month high.