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Euro area manufacturing economy maintains recovery pace: Markit

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Euro area manufacturing economy maintains recovery pace: Markit

The euro area’s manufacturing economy maintained its recovery pace in October, according to a monthly snapshot from Markit Group. The October PMI of 51.3 is unchanged from last month’s estimate.

Manufacturing activity was highest in Ireland, which registered a 30-month high. Growth in Austria reached a 28-month high, while Germany and Spain registered two-month highs. On the flipside, the manufacturing industry contracted at the fastest pace in four months in France, the euro area’s second largest economy. Greece’s manufacturing industry contracted at its steepest rate in three months, the monthly report concluded.

The data, which was collected between October 11 and 24, point to a “modest and fragile recovery” for the 17-nation currency bloc, which continues to struggle with record high unemployment. However, the data did show production, new orders and new export orders expanded for a fourth consecutive month. Growth in exports rose at a pace not far from the 27-month high in August.

In Germany, production levels rose for a sixth consecutive month, as manufacturers enjoyed new business growth. Overall, Germany’s manufacturing economy experienced a solid rate of expansion in October, a positive sign for the euro area’s largest economy.

Production growth was unable to spur job creation, as manufacturing employment fell for the 21st consecutive month. Declining payroll numbers reflect slower demand in the industry, as manufacturers continue to cut costs in the face of an uncertainty future. Modest job creation was reported in the Netherlands and Austria; Ireland reported the strongest increase in manufacturing employment last month.

The euro area manufacturing industry is “undergoing its strongest growth period for two-and-a-half years, since the mounting uncertainty caused by the escalating sovereign debt crisis hit business hard in 2011,” said Chris Williamson of Markit Group. Overall, the momentum that started in the third quarter should carry forward into the final quarter of the year.

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