European Manufacturing Industry Grows for Third Month
Dec 1, 2003
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Europe's manufacturing industry, equivalent to about one-fifth of the region's economy, expanded in November for a third month as accelerating global growth increased demand for factory goods.

An index based on a survey of about 3,000 companies compiled for Reuters Group Plc by Henley-on-Thames, England-based NTC Research rose to 52.2, the highest since February 2001, from October's 51.3. A reading above 50 shows expansion. The gain was led by new orders, which rose the most in more than 3 years.

Rising exports in the third quarter helped the economy of the dozen nations sharing the euro to rebound from a contraction in the previous 3 months.

Sales abroad were boosted by the fastest expansion in almost two decades in the U.S. economy, destination of about a fifth of the region's exports.

Clouding the outlook for faster growth is the euro's appreciation. The euro rose to $1.2043 on Dec. 1, the highest since its introduction in 1999 and bringing gains throughout the past year to 21 percent. The euro's increase makes European goods more expensive in the U.S. and erodes the value of U.S. revenue and earnings when translated into euros.

So far, accelerating demand abroad has more than made up for the effect of the euro's gains. The U.S., the world's largest economy, grew at an annualized rate of 8.2 percent in the third quarter, the quickest pace since 1984.

Japan's economy grew 0.6 percent to extend the longest period of growth since 1997.

Business confidence in the euro zone rose to the highest since June 2001 last month, and consumers were more optimistic than at any time this year, according to a European Commission survey released in late November.

Siemens AG, the world's fourth-largest mobile phone company, in November raised its forecast for global handset sales for the second time in 3 months.

German factory orders probably rose 0.7 percent in October from the previous month, a Bloomberg survey of 34 economists showed. Industrial production may have gained 1.3 percent, the median of 36 forecasts showed. The Economics Ministry will publish the figures on Dec. 4 and Dec. 5, respectively.

"A rebound is in the air, and it's gathering pace,'' Vittorio Merloni, chairman of Merloni Elettrodomestici SpA, said in November. Merloni, Europe's third-biggest maker of home appliances, said third-quarter profit rose 14 percent. (Bloomberg)

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