LONDON Reuters -- Manufacturing activity in the euro zone remained stable at the end of 2021 as factories took advantage of an easing of supply chain bottlenecks and stocked up on raw materials at a record pace, a survey showed.
The global coronaviruses have left factories struggling to get the materials they need, but a tentative easing of supply issues has resulted in a marked decrease in price pressures.
IHS Markit's final manufacturing Purchasing Managers' Index dropped to 58.0 in December from November's 58.4, matching an initial flash estimate and still comfortably above the 50 mark separating growth from contraction.
An index measuring output, which feeds into a composite PMI due on Wednesday and is seen as a good guide to economic health, held steady at November's 53.8.
The second half of 2021 has been an incredibly challenging period for euro zone manufacturers, but the latest survey data hasn't spoiled the festive cheer, said Joe Hayes, senior economist at IHS Markit.
We're seeing some tentative, but very welcome signs that the supply chain crisis is beginning to recede, which has plagued production lines across Europe. The input prices index fell to an albeit still high eight-month low of 86.7 from 88.9, which allowed factories to raise their prices at a much slower pace than in November, despite the fact that only marginal PMI data showed that purchases rose at a survey-record rate in December.
The European Central Bank last month took a small step in rolling back crisis-era stimulators but raised its inflation projections and now sees it at 3.2% this year, well above its 2.0% target.