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EU manufacturing sector growth slowed in January but remains strong

Eurozone manufacturing sector’s growth remained resilient at the start of the year despite renewed lockdowns across the continent that hurt activity.

Manufacturing was left to support the economy as fresh restrictive measures hit bloc’s dominant services sector while factories largely remained open.

EU’s Manufacturing Purchasing Managers’ index fell to 54.8 in January from 55.2 in December but ticked above 54.7 forecast, signaling that manufacturing output continued to expand at a solid pace, although with slightly slower growth.

Extended lockdowns are expected to keep much of services industry closed for some time that points to bleak EU’s economic outlook and raises worries that it will take more time for GDP to return to pre-pandemic levels, with economists estimating that recovery will take up to two years.

Factories were struggling to obtain the raw materials, due to shortages and increased prices, but increased their own prices at a lower rate than in December.

Despite all obstacles the optimism about the year ahead rises on hopes that vaccines will speed up the return to normality.