Eurozone manufacturing growth slipped against expectations last month but strength in exports and jobs still signal a healthy outlook heading into 2007 and likely further interest rate rises.
The RBS/NTC Eurozone Purchasing Managers' Index, which measures activity in the manufacturing sector, fell to 56.6 in November from 57.0 in October, falling short of forecasts for a rise to 57.1 but keeping firmly in the growth area above 50.0.
The employment index rose at its second-fastest pace in 6 years to 52.8 in November from 52.2 while a 4 point fall in the input prices index to an 8-month low at 64.0 suggested firms could expand workforces further as costs pressures ease.
That should bode well for consumer demand and economic growth in the 12-nation euro bloc, at least in the short term.
Growth in new orders, an indicator of future demand, eased slightly to 58.4 from 58.9 but remained at buoyant levels while the new export orders index - which includes intra-Eurozone trade - rose to a 4-month high at 57.1 from 56.7 in October.
The US ISM manufacturing survey, due later today - is forecast to edge up to 51.5 from 51.2.
Euro zone inflation rose to 1.8 per cent in November from 1.6 percent the previous month, data showed yesterday.
Chris Williamson, chief economist at NTC which compiles the data, said fears a planned rise in German Value Added Tax (VAT) in January would weaken consumer demand significantly in 2007 may also be overdone.