Manufacturing output in the 17-nation euro area contracted less than initially estimated in June, adding to signs the currency bloc’s economy is starting to emerge from a record-long recession, according to figures from Markit.
Markit’s U.K. factory index rose to the highest level in two years, indicating the recovery is gaining traction.
Manufacturing, which accounts for about 12% of the U.S. economy, is getting some support from the housing rebound as rising home values attract buyers, encourage building, and send consumers shopping for furniture, appliances and other household goods.
Construction gains in the U.S. and in other parts of the world are giving a boost to industrial companies such as Caterpillar Inc., the world’s largest maker of construction and mining equipment.
“We have a construction business that’s getting better,” said Michael DeWalt, director of investor relations for Peoria, Illinois-based Caterpillar.
“If you look at the three biggest end markets -- U.S., Europe in general and China, with the exception of Europe, I think they’re getting better but they have a lot of room to grow,” DeWalt said at a June 5 conference “Europe hasn’t even started to turn better yet.”
Recent regional factory reports were mixed, with the Federal Reserve Banks of New York and Philadelphia pointing to a rebound and a measure from the MNI Chicago Report falling.
In addition to housing, sustained strength in auto sales is keeping factories busy. Vehicle purchases increased to a 15.24 million annual rate in May, the strongest in three months, according to figures from Ward Automotive Group.