Key facts
- The S&P Global Eurozone Manufacturing PMI came in at 52.7 in October, above the preliminary estimate of 52.4.
- September's reading of 52.9 was the highest since May 2022, per the survey.
- Factory output fell to a four-month low of 52.8 in October from 53.6 in September.
- Export orders rose at the sharpest pace in more than 4-1/2 years, even as total new orders slowed.
- Input costs rose at the fastest rate in five months, and delivery times lengthened to their worst since June.
- Chris Williamson of S&P Global Market Intelligence said the data added pressure on the ECB to raise rates.
Euro zone manufacturing activity growth eased in October but held up, with the S&P Global Eurozone Manufacturing Purchasing Managers' Index dipping to 52.7 from 52.9 in September, according to a survey reported on Monday, November 2. The September reading was the highest since May 2022, and the October figure was above a preliminary estimate of 52.4. Readings above 50.0 indicate growth.
Factory output eased to a four-month low of 52.8 from 53.6 in September, though it remained above its long-run survey average. Total new orders, a key gauge of demand, rose at a slower pace, while export orders posted their sharpest increase in more than 4-1/2 years. Six of the eight euro zone countries tracked recorded growth, with France and Italy the outliers. Manufacturers added staff for a third straight month.
Operating costs rose at the fastest rate in five months, and firms raised selling prices sharply in response, though the pace of increase was broadly unchanged from September. Supply-chain strains intensified, delivery times lengthened to their worst since June, and manufacturers increased purchasing volumes at the fastest rate in nearly 4-1/2 years while stockpiling raw materials for the first time since December 2022.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said the reading extended the euro zone's best growth spell for manufacturing in over four years and that input cost inflation added pressure on the European Central Bank to raise interest rates. The report said the ECB left rates on hold the previous week as expected, that economists polled by Reuters said last month it would hike again in December, and that ECB president Christine Lagarde announced she would step down the following February. It also said crude oil futures had been trading over $116 a barrel, about 60% above pre-Iran war levels.