The manufacturing sectors in Spain and Italy saw growth in the final weeks of 2020 thanks to an injection into export demand which helped the two nations limit the economic impact of the coronavirus pandemic.
Photo: Lenny Kuhne / Unsplash
While Spain noted growth for the month of December, Italy ended there year on a seven-month high, seeing growth in every month from May to December, according to data gathered by IHS Markit.
Read more: Germany leads in factory growth as global output reaches decade heights
Spains PMI grew to 51, up from 49.8 in the previous month, while Italy grew to 52.8.
A rating of over 50 indicates a business reported an increase in comparison to the month prior.
Manufacturing across the Eurozone didn't quite live up to analysts' forecasts, but still maintained the highest level the bloc has seen since May 2018. Improvement in this sector was driven by foreign demand, reflecting economic recovery in Asia, where the virus is more contained.
Other sectors, such as tourism, recreation and transportation did not fare so well owing to new lockdown measures and precautions across the globe. Although the service sector as a whole continued to expand, the rate of increase was the weakest since September, with inflows of new business rising at the slowest pace since August.
The service industry has been hit particularly hard owing to the pandemic, which has forced several business closures, especially in Europe, which are still instigating lockdown measures to stem the viruses spread.
Chris Williamson of IHS Markit said: "The Eurozone's manufacturing industry had ended 2020 on an encouragingly strong note and its economy looks set to be hit by the pandemic in the fourth quarter far less than the unprecedented decline in the second quarter, thanks to the resilience of manufacturing."
Vaccine hope has restored confidence the manufacturing sector can return to a degree of normalcy before the end of the year, promising an economic resurgence across the bloc.
According to IHS Markit's PMI report, Italian manufacturers remained the most confident, with French manufacturing coming in second.
Forecasts made towards the end of last year show that Italy has been making a stronger recovery in the wake of the pandemic than most other economies in the Eurozone.
This is mostly attributed to durable consumer goods such as cars, where output was growing 20% month-on-month as of October.
Read more: Italy's industrial output confounds forecasts & suggests strong recovery
Conversely, the British car manufacturing industry has seen its biggest slump in over half a decade, which has prompted trade bodies to call for greater investment from the government.
However, the UK's pledge to ban the sale of petrol and diesel vehicles by 2030 has encouraged automakers lagging behind the curve to finally invest in electric vehicle technology.
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