Mubasher: Eurozone manufacturing activity extended its growth slowdown in November, hitting the weakest level in more than two years, according to data released on Monday.

The final IHS Markit Eurozone purchasing managers’ index (PMI) came in at 51.8 in November, compared with the preliminary reading of 51.5, and down from the final 52 in October, a report from IHS Markit said. This marked the lowest reading since August 2016.

“November’s PMI data underscore the extent to which manufacturing conditions have become more challenging, indicating that production could act as a drag on the Eurozone economy in the fourth quarter,” IHS Markit chief business economist Chris Williamson said.

Weakness during November was centered on the investment goods segment, as capital goods producers logged net drops in both production and new work.

Overall, the weaker growth of the manufacturing sector was fuelled by the second monthly drop of new orders in a row.

Weaker demand was partially attributed to challenging conditions in the auto industry, which also impacted production.

On the employment front, job creation was sustained during the month, but the weakness in output and new orders spilled over into the labour market, with the net growth in payrolls hitting the weakest since September 2016.

Production outlook was little changed from October when the future sentiment hit a nearly six-year low.

“The darker outlook is linked to trade wars and tariffs as well as intensifying political uncertainty and has led to increased risk aversion and a commensurate cutting back on expenditure, notably for investment,” Williamson said.

By 9:24 am GMT, the EUR/USD pair rose 0.36% to $1.1358.