Europe manufacturing industry grows for second month

Europe's manufacturing industry grew for a second month in November after the euro-region economy emerged from its worst recession in more than six decades.

An index of manufacturing in the 16-nation euro area rose to 51.2 from 50.7 in October, London-based Markit Economics said today. That was higher than an estimate of 51 released on Nov. 23. The gauge is based on a survey of purchasing managers and a reading above 50 indicates expansion.

European companies are stepping up output as the global economy recovers from the deepest slump since World War II following $2 trillion in stimulus measures from governments. Manufacturing in China, the world??s fastest-growing major economy, expanded the most in five years last month, data showed today. At the same time, a stronger euro is threatening to curb Europe's exports by making them less competitive.

"We expect a gradual recovery in the global and euro-area economy," said Owen James, an economist at the Centre for Economics and Business Research Ltd. in London. "The euro area is still some way short of experiencing strong growth in the short term."

The euro rose against the dollar after the data, trading at $1.5077 at 1:16 p.m. in London, up 0.5 percent on the day. The yield on the German 10-year benchmark bond gained 0.1 basis point to 3.16 percent.

Global Economy

The global economy may expand 1.9 percent next year and 2.5 percent in 2011, the Organization for Economic Cooperation and Development said on Nov. 19. The Paris-based group previously forecast the economy to grow 0.7 percent in 2010. In the euro region, gross domestic product may rise 0.9 percent next year instead of a previously projected stagnation, the OECD forecast.

China's manufacturing grew at the fastest pace in five years in November, a purchasing managers' index released today by HSBC Holdings Plc showed. In the U.S., the world's biggest economy, manufacturing probably expanded for a fourth month, according to the median forecast of economists surveyed by Bloomberg News ahead of the data due later today.

In Europe, confidence in the economic outlook improved to the highest in more than a year in November after the economy returned to growth in the third quarter. European shares gained today as concern eased that losses from a possible default by Dubai World will spread. The Dow Jones Stoxx 600 Index added 2.1 percent to 244.08.

Cement Maker

HeidelbergCement AG, Germany's largest cement maker, said last month that it was "very optimistic" about the next two years. Clothing maker Hugo Boss AG projects sales will remain "challenging" in the first half of 2010.

Companies continue to reduce their work forces even after the economy emerged from the recession. ThyssenKrupp AG, Germany's largest steelmaker, said on Nov. 27 that it plans to eliminate 20,000 jobs. Europe's unemployment rate held at the highest in more than a decade in October, data showed today.

A gauge of services in the euro-area economy rose to 53.2 in November from 52.6 in the previous month with the composite index increasing to 53.7 from 53, according to an initial estimate released last month. Markit is scheduled to publish the final report for November on Dec. 3.

From China Cement (2009-12-2)