The growth rate of the eurozone manufacturing sector ticked higher in October, as the final PMI data for output, new orders and employment all came in stronger than the earlier flash estimates. At 52.3 in October, the final seasonally adjusted Eurozone Manufacturing PMI® edged higher from September’s five-month low and the earlier flash reading (both 52.0). However, the rate of expansion signalled at the start of quarter four was still in line with the third quarter’s tepid growth outcome.
The improvement in the headline index between its flash and final estimates was largely centred on Germany, where the PMI rose by 0.5 points since its first publication through stronger trends in the output (+0.5) and new orders (+1.1) components. Headline PMI indices were above the critical no-change mark of 50.0 in all nations except Greece, with faster growth signalled for Italy, Austria and the Netherlands. The Greek PMI continued to move higher nonetheless, reaching a five-month high.
Eurozone manufacturing production expanded for the twenty-eighth month running in October. Output growth ticked higher during the latest survey month, underpinned by a slightly sharper increase in new orders. Intakes of new export business* also rose at a moderately faster pace, the quickest since June.
The strongest rates of output growth were signalled in the Netherlands, Italy and Austria, which were also the only nations to report faster rates of expansion than September. Germany and Ireland also reported relatively solid expansions of output, whereas as growth was comparatively modest in France and Spain.
All of these nations also reported increased intakes of total new business and new export orders. For most this represented a continuation of an expanding trend, except France which saw an improvement in total new work received for the first time since April 2014 and growth of new export business for the first time in five months. Although Greece remained in a severe downturn, its rates of contraction in production, new orders and new export business have all eased substantially since the survey-record declines registered in July.
Euro area manufacturing employment rose again in October, extending the current sequence of gains to 14 months. However, the rate of jobs growth remained weak and slipped to the weakest since February. Higher employee headcounts were reported in Germany, Italy, Spain, the Netherlands, Austria and Ireland, although only Italy, the Netherlands and Austria saw faster increases.
The combination of slower job creation and ongoing new order growth maintained the pressure on manufacturers’ capacity in October. This was highlighted by a further increase in outstanding business, the sixth in as many months. Average purchasing costs fell to the greatest extent in nine months during October, reflecting the ongoing decline in commodity prices. Meanwhile, output charges were reduced for the second successive month, albeit only modestly. Only the Netherlands reported an increase in average selling prices. The sharpest discounting was signalled in Greece and France.