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Eurozone Sept factory PMI hits highest since Feb 2011 as new orders accelerate
[LONDON] Factories across the eurozone enjoyed their most productive month since early 2011 in September, and the momentum looks set to continue into October as new order growth accelerated, a survey showed on Monday.
That increase in demand and activity came despite firms raising prices at the fastest rate in five months, in welcome news for policymakers at the European Central Bank, which looks set to announce a reduction of its asset-buying programme soon.
IHS Markit's final manufacturing Purchasing Managers' Index climbed to 58.1 from August's 57.4, just missing a flash estimate of 58.2 but its highest level since February 2011. Any reading above 50 indicates growth.
An output index that feeds into a composite PMI due on Wednesday rose to 59.2 from 58.3, its highest since April 2011.
"The euro zone manufacturing boom kicked into an even higher gear in September. The recovery is also looking increasingly broad-based, with rising demand across the region lifting all boats," said Chris Williamson, chief business economist at IHS Markit.
"Surging order book growth has encouraged manufacturers to take on extra staff at a rate never previously seen in the 20-year history of the PMI survey."
Suggesting October will also be a busy month for factories, a sub-index measuring new orders rose to 58.5 from 58.3. It has only been higher once since early 2011, in June of this year.
Firms also built up backlogs of work - a good sign for future output - at the second-fastest rate in the 15 years it has been monitored while also raising prices.
Inflation in the bloc undershot expectations in September, official Eurostat data showed on Friday, highlighting price growth remained week and supporting the ECB's case for only gradual removal of stimulus.
Prices haven't risen as fast as the central bank would like. A Reuters poll last month suggested the ECB will announce at its Oct 26 policy review a six-month extension to its asset purchase programme but cut its monthly spend to 40 billion euros from January.