Growth spurt by Eurozone manufacturing PMI

4 November 2010
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Purchasing Manager Index

4 November 2010 | Angeline Albert

Eurozone manufacturing expanded at its faster rate for the past few months in October, according to the Markit Eurozone Manufacturing Purchasing Managers’ Index.

October’s figure was 54.6, up from September’s eight-month low of 53.7. A score of 50 represents no change.

For the first time in three months, manufacturing production accelerated. Output growth improved from September’s 11-month low, reflecting faster increases in the majority of Eurozone countries.

There was expansion in almost all of the nations covered, with the exception of Greece, where the rate of deterioration accelerated.

Rates of output expansion improved in Germany, Italy, Spain, the Netherlands, Austria and Ireland. Although growth slowed sharply in France, it stayed above the euro area average.

France and Germany led the growth in total new orders in October, seeing by far the fastest rates of increase. New work rose in Spain, the Netherlands and Ireland – following declines one month earlier.

Manufacturing employment rose for the sixth month running in October, with the rate of jobs growth the fastest since March 2008.

Markit chief economist Chris Williamson said: “An improvement in the PMI for the first time in three months provides much needed reassurance that manufacturing remains an important driver of the euro area recovery. However, it is clear the recovery has moved down a gear. The pace of expansion has eased markedly from the surging near double-digit annual pace seen earlier in the year to a more modest 3 to 4 per cent.

“Despite the overall improvement, national divergences will continue to raise tensions for policy-making. Although Greece was the only country to see manufacturing output decline, production continued to barely rise in the Netherlands, Ireland and Spain, contrasting with strong growth in Germany, France and Italy.”

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