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Falling Employment In Eurozone Manufacturing Sectors

James Boston
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Falling Employment In Eurozone Manufacturing Sectors

Despite a general improvement in the latest Eurozone Purchasing Managers Index (PMI) data, there remains significant disparity across the individual nation’s manufacturing sectors. The periphery and recovering countries have unsurprisingly posted healthy figures while some of the zone’s larger core nations have been struggling to reproduce these results. Germany, Greece and Ireland all improved their numbers in the latest data release while France and Italy suffered further falls, Spain managed to hold steady on the month.

The Spanish PMI figure has come in once again at 52.6 for the month of October, this figure is welcome given market analysts predictions for a drop to 52.3 in the latest release. Markit Economics, compilers of the PMI index, have noted that rises in both output an new orders have provided a reason for optimism around Spain’s industrial sector, but cautioned that much of the new orders figures were driven by price discounting and that the absence of a pick up in employment in the sector signified a slight lack of confidence in the future growth of Spain’s manufacturing sector.

In France the narrative is a little weaker, the PMI manufacturing number for the month of October fell back slightly to 48.5 from 48.8 in September, the silver lining being that market analysts had expected the drop to be greater. The French industrial sector remains in contraction according to these latest PMI number, orders have fallen significantly despite deep price discounting and employment numbers have been cut for the seventh straight month.

Italy’s manufacturing sector has joined France on the contractionary side of the index. The latest number of 49.0 represents a significant and unexpected fall from the September figure of 50.7, there was an anticipation that today’s reading would hold up at this 50.7 level. Order backlogs are drying up at a rapid pace in Italy and this bodes badly for the near term prospects for this country’s industrial sector.

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