Eurozone October final manufacturing PMI 52.7 vs 52.4 prelim
Prior 52.9
Euro area industry activity softened slightly in October, with the headline PMI estimate touching a two-month low. The output index slumped further to 52.8 from 53.6 in September, dropping to a four-month low. Overall, it still marks a modest expansion in manufacturing conditions despite slower new order
growth and increased supply-chain pressures.
The most notable drags were France and Italy, bucking the broader expansion trend across the region. Of note, both countries posted renewed deteriorations on the month.
In the case of France, domestic political uncertainty is the main drag and is biting at Europe’s second-largest economy. That is a big problem that might have potential spillovers to elsewhere across the region, not just in terms of borrowing costs but also fiscal risks and uncertainty.
Circling back to the report, supply-related challenges remained at large in October,
with average delivery times from vendors lengthening to
the greatest degree since June. But despite shipping delays,
firms were able to add to their input stocks during the latest survey
period – marking the first month this has been the case since
December 2022.
The other key takeaway from the report is that there was a rapid acceleration of cost
pressures as input prices rose at the quickest pace since
May. This was the second successive month that inflation
has increased.
As such, that won’t let the ECB breathe all too easily ahead of their December decision as inflation pressures continue to present policymakers with a headache amid growing risks of a wider economic slowdown in the euro area.
This article was written by Justin Low at investinglive.com.
