Eurozone manufacturing activity languishes at seven-year low
Activity in the eurozone manufacturing sector languished at seven-year lows in October, according to data released on Monday.
IHS Markit's final eurozone manufacturing purchasing managers' index ticked up to 45.9 from an initial reading and September's 45.7. This was a touch ahead of expectations for an unchanged reading but still well below the 50.0 mark that separates contraction from expansion and close to the seven-year low recorded the month before.
Markit highlighted "sustained weakness" in output, new orders and purchasing.
Chris Williamson, chief business economist at IHS Markit, said: "Geopolitical concerns, ranging from Brexit to US trade policy, continue to create uncertainty, further dampening demand both at home and in export markets.
"The focus of manufacturers remains on cost cutting, reducing inventories and investment spending while also lowering payroll numbers at an increased rate."
The manufacturing PMI for Germany edged up to 42.1 in October from a 10-year low of 41.7 in September, but remained firmly in contraction territory and marked the second-lowest reading since June 2009.
New orders fell markedly and for the thirteenth month in a row, while employment declined to the greatest extent since January 2020.
Phil Smith, principal economist at IHS Markit, said: "The German manufacturing sector remains in recession and continues to pose a threat to the domestic economy through a rising number of factory job losses.
"Employment across the goods-producing sector is now falling at the fastest rate for the best part of ten years, though it should be said that the decline is nothing like that seen during the depths of the global financial crisis, and is so far mainly restricted to contractors."