European manufacturing grew faster in pace in four months

European manufacturing industries expanded at its fastest pace in four months in November, led by Germany, the largest economy in the region.

An indicator of manufacturing sector in the 16-nation euro rose to 55.3 from 54.6 the previous month, London-based Markit Economics, said today. Previously reported an increase to 55.5 in November. A reading above 50 indicates expansion.

Germany has led to the recovery of the region as global demand boosted sales in the companies of Daimler AG: BASF SE. The European Commission said on 29 November that the German growth will exceed the euro zone growth this year, the economies of Ireland, Spain and Greece may continue to fall.

"Economic activity in the euro zone slowed in the third quarter and seems likely to be relatively moderate in coming months," said Howard Archer, chief European economist at IHS Global Insight in London. "Tightening of fiscal policy in the region, high unemployment, recurring problems of sovereign risk and a lower overall activity are a serious threat."

New orders at manufacturers rose at the fastest pace since July and increased payrolls for the seventh month, Markit said.

"Less Rosy '

In Germany, the manufacturing index rose to 58.1, a maximum of three months, from 56.6 the previous month, down from an initial estimate of 58.9. France indicator rose to a 10-year high of 57.9 from 55.2, while the flag of Italy fell to 52 from 53.

the so-called peripheral countries of Europe continued to struggle. Ireland's rate was 51.2, while manufacturing contracted Spanish stagnated and Greece.

Beyond Germany and France, "the conditions are much less optimistic in other parts of the euro area," said Markit chief economist Chris Williamson.

A flag made in China rose more than economists forecast in November, according to a report of the current federation of logistics. A PMI published by HSBC Holdings Plc jumped also. In the U.S., the Institute for the index of Supply Management's factory probably fell to 56.5 from 56.9, according to the median of 82 economists surveyed by us.

the euro-region growth may weaken to 1.5 percent next year from 1.7 percent in 2010, governments cut spending to reduce the budget deficit, the Brussels-based commission said this week. On November 28, Ireland became the second euros for foreign aid as officials tried to prevent a debt crisis from spreading.

Some companies have cut spending to revive profits. ThyssenKrupp AG, Germany's largest steelmaker, said yesterday it returned to profit in the fiscal year through September after the sale of divisions and reducing its workforce. Euro-area unemployment rose to 10.1 percent in October, the highest in more than 12 years.

Markit said on 4 November that an indicator of the euro zone services rose to 55.2 in November from 53.3 in the previous month, while the composite index rose to 55.4 from 53.8 in October. Markit will publish the final figures for both indicators on 3 December.