Financial News: Eurozone Manufacturing Sector Logs Robust Growth

Eurozone Manufacturing Sector Logs Robust Growth

(RTTNews) - The euro area manufacturing activity expanded at a solid pace in October despite slowdown in factory order growth and intensifying supply-chain pressures, final purchasing managers' survey data from S&P Global showed Monday.

The final manufacturing Purchasing Managers' Index fell to 52.7 in October from 52.9 in the previous month, which was the highest score since May 2022. The reading was above the flash estimate of 52.4.

"The sustained growth recorded since February paints an encouraging picture of resilience for the manufacturing sector, which has been buffeted by the headwinds of tariffs and conflicts in the Middle East and Ukraine, and in particular the surge in costs and supply difficulties that these have caused," S&P Global Market Intelligence Chief Business Economist Chris Williamson said.

"Instead, increased defence spending, precautionary inventory building, diversification and changing trade patterns due to US tariffs have created growth opportunities for many producers," Williamson added.

Factory output increased again in October but the rate of growth eased to a four-month low. Total new business intakes increased at a weaker pace despite exports recording the sharpest increase in just over four-and-a-half years.

Manufacturers hired additional staff, extending the current period of jobs growth to three months.

The survey showed that supply-related challenges remained at large as average delivery times from vendors lengthened to the greatest degree since June.

Manufacturers raised their purchasing volumes at the fastest rate in close to four-and-a-half years.

On the price front, data revealed a rapid acceleration of cost pressures. Input prices rose at the quickest pace since May. Consequently, manufacturers raised their prices sharply in response, although the extent to which charges were lifted was little-changed from September.

Finally, companies remained optimistic that output would rise over the next 12 months.

Among big four economies, Germany and Spain reported stronger growth, surpassing respective survey averages. France and Italy were the only two euro area member states to buck the broader expansion trend.

Germany's manufacturing activity registered solid growth in October despite a resurgence in cost pressures. The final factory PMI posted 54.2, in line with estimate, and up from 53.9 in September.

France's manufacturing activity fell back into contraction in October amid falling production, demand, employment and intensifying cost pressures. The factory PMI dropped to 49.5 from 50.6 in the previous month. The flash reading was 49.3.

Italy's manufacturing sector declined deeper into contraction with stronger declines in new orders and output. At 49.4, the factory PMI was down from 50.4 in September. Meanwhile, Spain's manufacturing sector expanded at the fastest pace in over a year during October. The factory PMI registered 52.2, up from 51.0 in the previous month.

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