Nov 2, 2016 - Eurozone manufacturing expansion gathers momentum in October .... is a world leader in critical informatio
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Purchasing Managers’ Index® MARKET SENSITIVE INFORMATION EMBARGOED UNTIL 1000 (CET) / 0900 (UTC) November 2nd 2016
Markit Eurozone Manufacturing PMI® – final data Eurozone manufacturing expansion gathers momentum in October Key findings: Final Eurozone Manufacturing PMI at 53.5 in October (Flash: 53.3, September Final: 52.6)
Broad-based growth acceleration led by the Netherlands and Germany
Input costs and output prices both rise
Data collected October 12-24
Markit Eurozone Manufacturing PMI
Countries ranked by Manufacturing PMI: Oct.* Netherlands Germany Austria Spain Ireland France Italy Greece
55.7 55.0 (flash: 55.1) 53.9 53.3 52.1 51.8 (flash: 51.3) 50.9 48.6
15-month high 33-month high 4-month high 6-month high 4-month high 31-month high 2-month low 5-month low
Eurozone PMI Output Index, sa, 50 = no change
Eurostat, 3m/3m % change
65
3
60
2
Eurozone Manufacturing PMI, sa, 50 = no change 65
1
55
60
0
50
-1
55 45
-2
50
40 Industrial Production (excluding construction)
-3
PMI Output Index
-4
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
1998
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
30
2004
-6
35
2003
-5
25 2002
30 2001
40
2000
35
1999
45
Sources: IHS Markit, Eurostat
Manufacturing PMI, sa, 50 = no change 65
Source: IHS Markit.
Germany
The Netherlands surged to the top of the Manufacturing PMI rankings in October, with growth accelerating to a 15-month peak. Germany was also a top performer, expanding at the quickest pace in almost three years.
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Italy
50
Spain
Ireland
30
Greece
2016
Austria
35
2015
Netherlands
40
2014
45
2013
The final Markit Eurozone Manufacturing PMI rose to a 33-month high of 53.5 in October, up from 52.6 in September and the earlier flash estimate of 53.3. This signalled the steepest rate of improvement in operating conditions since January 2014.
France
55
2012
®
60
2011
The rate of expansion of the eurozone manufacturing sector gathered momentum at the start of the final quarter. Growth of production, new orders, new export orders and employment all accelerated, while price pressures showed further signs of increasing.
Source: IHS Markit.
Austria, Spain and Ireland saw solid and improved rates of expansion at the start of the final quarter. Conditions also strengthened in France, as its headline PMI stepped back into expansion territory and reached a 31-month high. Italy eked out mild growth, albeit slower than in September, while
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News Release
Greece recorded a contraction for the second straight month.
Comment
Underpinning the upward movement in the eurozone Manufacturing PMI were the sharpest expansion of production since April 2014 and the second-quickest increase of total new orders over the same period. The outlook for output growth also remained positive, as backlogs of work rose to the greatest extent in 33 months.
“The eurozone manufacturing sector made a positive start to the final quarter. Output, new orders and new export business all rose at some of the fastest rates achieved over the past three years, building on the solid increases in quarter three and underpinning the steepest jobs growth since mid-2011.
Companies indicated that domestic and export demand improved in October. New export business* rose for the fortieth successive month, with the pace of increase ticking up to its fastest in over two-and-ahalf years. Almost all of the nations covered by the survey saw growth of new export orders, the exception being Greece.
“The broad base of the growth acceleration signalled by the headline PMI was especially pleasing. Five out of the eight nations covered saw faster expansions during October, including some of the key larger growth engines such as Germany, the Netherlands and Spain. French manufacturing meanwhile grew for the first time in eight months and at the strongest pace in over two-and-a-half years. The only real blot on the copybook was a further contraction in Greece, although a recent switch to tepid expansion in Italy should also be watched closely.
The strongest expansion in new export business was registered in Germany, while France saw an increase for the first time in three months. Solid gains were also recorded by Spain and the Netherlands, while growth was comparatively mild in Italy, Austria and Ireland. Job creation at eurozone manufacturers accelerated during October, reaching a near five-and-a-half year record. Rates of growth were strongest in Germany and the Netherlands, hitting 61- and 66-month highs respectively. Employment also rose at a quicker pace in Italy and Greece, and returned to growth in Ireland, but slowed slightly in Austria and Spain. Staffing levels moved closer to stabilizing in France, but nonetheless fell for the eighth straight month.
Rob Dobson, Senior Economist at IHS Markit said:
“On the price front, inflationary pressures in the manufacturing sector showed further signs of recovery. Input costs rose at the quickest clip in 15 months on the back of increased commodity prices, especially for energy and oil-related products. These cost pressures may be starting to trickle further along the supply chain, as firming demand allowed manufacturers to raise output charges in October for the first time since August last year.” -Ends*Including intra-eurozone trade.
October survey data pointed to rising price pressures. Input cost inflation accelerated to a 15month high, mainly due to increased commodity prices (particularly oil-related costs). Meanwhile, output charges rose for the first time since August 2015. Firming demand permitted some pricing power, allowing manufacturers pass on part of the increase in their costs.
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© IHS Markit 2016
News Release
For further information, please contact: Rob Dobson, Senior Economist Telephone +44-1491-461-095 Mobile +44-7826-913-863 Email
[email protected]
Joanna Vickers, Corporate Communications Telephone +44 207 260 2234 Email
[email protected]
Note to Editors: The Eurozone Manufacturing PMI® (Purchasing Managers' Index®) is produced by Markit and is based on original survey data collected from a representative panel of around 3,000 manufacturing firms. National data are included for Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece. These countries together account for an estimated 89% of eurozone manufacturing activity. The final Eurozone Manufacturing PMI follows on from the flash estimate which is released a week earlier and is typically based on approximately 85%–90% of total PMI survey responses each month. The October 2016 flash was based on 89% of the replies used in the final data. The average differences between the flash and final PMI index values (final minus flash) since comparisons were first available in January 2006 are as follows (differences in absolute terms provide the better indication of true variation while average differences provide a better indication of any bias): Index Eurozone Manufacturing PMI®
Average difference
Average difference in absolute terms
0.0
0.2
The Purchasing Managers’ Index (PMI) survey methodology has developed an outstanding reputation for providing the most up-to-date possible indication of what is really happening in the private sector economy by tracking variables such as sales, employment, inventories and prices. The indices are widely used by businesses, governments and economic analysts in financial institutions to help better understand business conditions and guide corporate and investment strategy. In particular, central banks in many countries (including the European Central Bank) use the data to help make interest rate decisions. PMI surveys are the first indicators of economic conditions published each month and are therefore available well ahead of comparable data produced by government bodies. Markit do not revise underlying survey data after first publication, but seasonal adjustment factors may be revised from time to time as appropriate which will affect the seasonally adjusted data series. Historical data relating to the underlying (unadjusted) numbers, first published seasonally adjusted series and revised data are available to subscribers from Markit. Please contact
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