According to surveys released on Wednesday (Dec 1), global factory activity accelerated in November but major supply bottlenecks were still a cause for concern.
The IHS markets final manufacturing purchasing managers index for the Eurozone rose slightly to 58.4 in November, up from 58.3 in October. The number was well-ahead of the 50 mark that splits growth from contraction. But inflation was a concern.
Factories in the Eurozone passed on rising costs of raw materials to customers at the fastest rate in the survey’s history. It suggested overall inflation in the block will continue to overshoot the European Central Bank’s two percent target which put pressures on the bank to act.
Data released on Tuesday (Nov 30) showed inflation at a record high 4.9%. The update from the eurozone followed earlier reports from Asia. In China, the closely watched Caixin market purchasing managers index showed factory activity fell back into contraction in November.
Soft demand and higher prices hurt manufacturers. The survey focuses on small firms in coastal regions and differed to China’s official PMI numbers that showed manufacturing rose at a modest pace last month.
Beyond China, factory activity seemed to be in recovery in a number of countries including Japan, South Korea, India, Malaysia, and Vietnam. But the November surveys likely did not reflect the recent spread of the new Omicron variant that has caused some countries to impose new border controls and may add more pressure to supply chains disrupted by the health crisis.