Euro area’s manufacturing growth rebounds further in October, PMI index rises to 54.8

Euro area’s manufacturing sector’s growth saw a further rebound in October, showed the IHS Markit Eurozone Manufacturing PMI. The headline figure rose to 54.8 from September’s 53.7. Today’s figure was the best recorded by the survey for 27 months and maintained the current run of continuous growth that started in July. Growth was recorded throughout all three market groups in the month, albeit to varying degrees. The most rapid growth was seen in investment goods, where growth rebounded to its highest level for more than two years. A strong rise was seen in intermediate goods, but growth softened to a marginal rate amongst consumer goods producers.

Germany was the best-performing nation again, with the respective PMI index recording its highest level for more than two-and-a-half years. Austria saw its best PMI outcome for almost two years, whilst Italy saw an acceleration in growth to a 31-month high. Elsewhere, Spain recorded strong growth, but growth was only modest in France and marginal in both the Netherlands and Ireland. Greece was the only nation to see a deterioration in operating conditions.

A fourth straight monthly rise in manufacturing production was seen in October, with the pace of growth strengthening to its sharpest for more than two-and-a-half years. A similarly sized rise in new orders was also seen, with growth in October the best seen since the beginning of 2018. Germany led the way in terms of both output and orders, with growth in the latter a national survey record. Gains in overall new orders saw stronger demand from both domestic and external clients. New export business rose at a marked rate that was the best recorded by the survey since February 2018.

Sharply rising levels of new business aided in driving growth of work outstanding for a third consecutive month. Furthermore, the pace of growth was the sharpest seen by the survey since February 2018. In spite of this, employment levels continued to be cut, extending the current period of contraction to a year-and-a-half. Manufacturers raised their purchasing activity at a marked pace in October, with growth the best since early-2018.

Looking at future production, business sentiment continued to be positive for the fifth straight month. Italian and German manufacturers were the most optimistic about output in the coming 12 months.