You are here

Eurozone manufacturing activity accelerates in Sept as demand picks up: PMI

Monday, October 3, 2016 - 16:17
9-40045391 - 01_10_2016 - FORD TRUCK.jpg
Manufacturing activity in the euro zone picked up last month as demand increased from both within and outside the currency bloc, driving factories to increase headcount, a survey showed on Monday.

[LONDON] Manufacturing activity in the euro zone picked up last month as demand increased from both within and outside the currency bloc, driving factories to increase headcount, a survey showed on Monday.

However, the upturn remained uneven and was centred on Germany and its neighbours. Growth was far weaker than earlier in the year in Spain, Italy and Ireland, while manufacturing in France continued to decline.

Markit's Manufacturing Purchasing Managers' Index for the bloc rose to 52.6 in September from 51.7 in August, unchanged from a flash estimate. An index measuring output also held above the 50 mark separating growth from contraction, coming in at 53.8, above August's 53.3.

"The key message from the September survey is that the euro area's manufacturing economy continues to expand at an encouragingly solid pace. The concern is that the upturn is worryingly uneven," said Chris Williamson, chief business economist at IHS Markit.

A sub-index measuring new orders jumped to 53.4 from August's 18-month low of 51.4, registering one of its highest readings in the past year, and factories also accelerated hiring.

"For a region beleaguered by still-high overall unemployment, the fact that the upturn is generating more jobs is especially good news. The latest rise in factory payroll numbers was one of the best seen over the past four years," Mr Williamson said.

Also likely providing some good news for policymakers at the European Central Bank, the upturn came despite firms only trimming prices by the smallest of margins.

Years of ultra-loose monetary policy have so far failed to get inflation anywhere near the ECB's 2 per cent target ceiling, so any sign of the policy having an effect will be welcomed. Consumer prices grew 0.4 per cent in September, official data showed on Friday.

REUTERS