Emerging Europe weighted average manufacturing PMI improved for the third consecutive month in November to 51.0 from 50.7. Thus, in Q4 PMI is running more than one point higher than the Q3 average, led by Hungary, Russia, and Turkey while Poland is flat and although Czech PMI has fallen, it still remains high. The strong Germany and euro area manufacturing PMI implies further upside prospects for Central Europe growth.

Russia manufacturing PMI at 50.1 remained neutral, implying that the recession has ended, but that a recovery has not yet taken hold. This is in line with the forecasts that while the recession has neared its bottom, Russia will experience only a mild L-shaped recovery. Output and new orders were somewhat strong, but export orders and employment remained weak. Turkey manufacturing PMI gained 1.5 points to 50.9 implying mild positive growth. PMI was led higher by improvements in output and new orders with export orders and employment remaining strong.

In Central Europe, Hungary solidified its lead position with manufacturing PMI improving to 56.2, the highest level since January 2014. PMI was supported by very strong output, new orders and exports. In contrast, employment fell to slightly below 50. Czech Republic PMI increased slightly to 54.2 still signalling strong growth though much lower than Q2 levels. Output increased but new orders and new export orders were relatively soft. Poland PMI fell slightly to 52.1, defying expectations that it would increase. This appears somewhat low compared to the steady 3.5% GDP growth that Poland has maintained.