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Eurozone manufacturing job creation hits survey-record high in September

Staff Writer | October 3, 2017
Conditions in the euro area manufacturing sector strengthened to the greatest extent in over six-and-ahalf years during September.
Eurozone manufacturing
Eurozone   IHS Markit Eurozone Manufacturing PMI
At a 79-month high of 58.1, little-changed from the flash estimate of 58.2, the final IHS Markit Eurozone Manufacturing PMI signalled expansion for the fifty-first month in a row.

The average reading over the third quarter (57.4) was the highest since the opening quarter of 2011.

The upturn remained broad-based by nation, with all eight of the surveys comprising the euro area average reporting growth.

Germany moved back to the top of the rankings – its PMI hit a 77-month high – while the Netherlands PMI scored a 79-month record, in second position overall.

Austria was again one of the strongest-performing nations, despite seeing growth ease to a four-month low.

Eurozone manufacturing production expanded at the fastest pace in almost six-and-a-half years in September, underpinned by a strong and accelerated increase in new work received.

The rate of growth in new orders almost matched the 76- month record seen June.

Improving domestic market conditions combined with increased levels of new export* business were the main factors supporting the latest increase in new work.

Although September saw the rate of expansion in new export orders moderate, it remained among the strongest witnessed over the past six-and-a-half years.

Faster increases were registered in the Netherlands and Spain, while slower but still strong growth was seen in Germany, France, Italy and Ireland.

Greece saw a mild contraction.

Although the rate of new export order growth slowed in Germany, it remained sharp and was only exceeded by that seen in the Netherlands.

Stronger growth of output and new orders tested capacity at eurozone manufacturers, leading to the steepest increase in backlogs of work for over 11 years.

This in turn encouraged further job creation, with employment rising to the greatest extent since the eurozone series began in June 1997.

Similar to the trend in production volumes, the sharpest increases in staffing levels were seen in the Netherlands (79-month record), Germany (steepest gain in 76 months) and Austria (four-month low).

Accelerations were seen in France, Italy and Spain, whereas rates of increase slowed in Ireland and Greece.

Capacity constraints were also felt at suppliers, as signalled by the sharpest lengthening in vendor delivery times since April 2011.

Higher demand for raw materials and associated shortages were the main factors underlying increased lead times.