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Eurozone manufacturing growth at 26-month low

Staff Writer | November 2, 2018
The euro area manufacturing sector expanded at the slowest pace in more than two years in October, final data from IHS Markit showed on Friday.
Eurozone manufacturing
Europe   Any reading above 50 indicates expansion in the factory sector
The manufacturing Purchasing Managers' Index for Eurozone fell to a 26-month low of 52.0 from 53.2 in September.

The flash reading released on October 24 was 52.1. Any reading above 50 indicates expansion in the factory sector.

Slower manufacturing growth was recorded across much of the single currency area in October.

The downturn in overall growth was closely linked to the deterioration in order books. Despite the fall in new orders, euro area manufacturing registered a net increase in production.

Further, survey showed that employment growth was sustained in October but continued to slow.

On the price front, data revealed that input price pressures intensified on the back of rising energy, food, fuel and metals prices. Output charges were raised, albeit the lowest in 14 months.

"The combination of destocking, deteriorating order books and drop in business optimism will add to concerns that growth risks are shifting to the downside rather than being "broadly balanced", as indicated by the ECB," Chris Williamson, chief business economist at IHS Markit, said.