Eurozone manufacturing PMI edged up to 51.6 in November (flash 51.5) from 51.3 in October.
Holland, Austria, Germany, Ireland and Italy performed well, but France remains a concern.
Output, new orders and new exports expanded for the fifth successive month but failed to halt the ongoing slide in employment, says Markit.
"Manufacturing across the region is enjoying its best performance for two-and-a-half years, but the pace of growth remains only modest," says Markit. "The data suggest that output is rising at a quarterly rate of only around 0.6% in the fourth quarter so far."
Improving exports in countries such as Italy, Spain and Ireland are offsetting domestic weaknesses, "underscoring how producers in these countries are becoming more competitive and suggesting the long-term outlook is brightening."
The euro is -0.1% at $1.3577 after being positive earlier. (PR)