Eurozone’s manufacturing growth accelerates slightly in September

Euro area’s manufacturing sector saw a slight acceleration in the pace of expansion in September. Improvement was seen in growth of new orders, output, employment and new export business. The final Markit Eurozone manufacturing PMI rose to 52.6 in September, a three-month high. The average reading in the third quarter was slightly higher than in the second quarter, noted Markit.

National PMI indices hinted at growth in six out of the eight nations covered. Germany’s PMI rose to a three-month high. Increased growth was also witnessed in Spain and Austria, whereas growth moved back into expansion territory in Italy. France’s PMI edged closer to stabilization. In Ireland and Netherlands, the pace of expansion slowed a tad in the month, whereas it contracted slightly in Greece.

In Austria and Ireland, the trends in new export orders entered expansion territory, whereas in Greece it fell into contraction after gaining in the previous two months. In the meantime, the rate of contraction alleviated in France. The continuous upturn in the currency bloc’s manufacturing sector supported additional rises in purchasing activity and employment in September. Euro area recorded job creation for the twenty-fifth straight month, with the rate of growth rebounding since August. Volumes of input purchase increased at the sharpest rate for three months.

National PMI data hinted that levels of staffing increased in six out of eight nations covered. France and Ireland were the exceptions that recorded declines. In Germany, Austria, Spain and Italy, job creation accelerated; however, it slowed in Greece and the Netherlands. The latest growth in capacity of the euro area manufacturing sector also showed an additional accumulation of backlogs of work at factories. Growth of outstanding business accelerated to a 31-month high, said Markit.

Meanwhile, cost burdens facing manufacturers increased for the third straight month and at the most rapid rate since July 2015. But the pace of input price inflation continued to be weak as compared to the long-run survey trend. Average selling prices remained widely unchanged, as rises in Ireland and in German were countered by falls in all of the other countries covered, noted Markit.