- Euro-area Factory PMI Climbs Further; Hits 80-month High in October
Factory activity in the Euro-area continued to expand at a faster pace in October, according to the IHS Markit report released on Thursday.
The Euro-area Manufacturing Purchasing Managers’ Index rose from 58.1 in September to 58.5 in October.
Also, while manufacturing production in the Euro-area eased from September’s high, new job continued to grow at the fastest pace in 80 months.
Employment in the sector was solid, rising at a new survey-record rate. This can be attributed to the increase in demand in the Euro-area. Especially the German manufacturing index that grew at 60.6 in October. The highest in 6.5 years.
“October’s PMI was the highest since February 2011 and the second-highest in over 17 years. The overall performance of the manufacturing sector so far this year has been the strongest since 2000,” said Markit’s Chris Williamson.
With production, demand and price pressures growing in the manufacturing sector across the Euro-area, the report supports the European Central Bank’s recent monetary stance to cut down on asset purchase program in 2018.
Inflation rate in the region remains below ECB’s 2 percent target but surged in selling price continued to pressure prices, indicating that increase in productivity is aiding price pressures as suggested by the apex bank last week.
The region is expected to grow at about 2.2 percent this year, better than the previous projection.
Claus Vistesen at Pantheon Macroeconomics said: “The euro area manufacturing sector is in fine form. New orders and output are rising, while substantial work backlogs continue to support a steady increase in employment.”
Staffing levels in the Euro-area have now risen for 38 consecutive months.