Eurozone manufacturing PMI higher than expected in October

The Markit purchasing managers index monitoring growth in the Eurozone manufacturing sector edged slightly higher last month, rising to 52.3 from the five-month low of 52.0 in September and marginally above the flash estimate of 52.0.

The reading marked the 28th consecutive month of expansion for the sector.

Final data for output, new orders and employment all came in above the earlier flash estimates, Markit said, adding the improvement in the headline index between the flash and final estimates was largely driven by a 0.5 points growth registered in Germany.

However, despite the improvement from the initial flash estimate, growth in Germany’s manufacturing sector hit a three-month low, while it fell to a 22-month low in Spain.

There was much better news for Austria and Italy, where the PMI registered a 20 and three-month high respectively, while Greece notched a five-month high of 47.3, although it remained the only country below the 50.0 threshold that signifies expansion.

“The Eurozone manufacturing recovery remains disappointingly insipid,” said Markit’s chief economist Chris Williamson.

“The October survey is signalling factory output growth of only 2% per annum, a lacklustre performance given the amount of central bank stimulus in place.

“With factory production lacking vigour, employment growth sagging to an eight-month low and output prices falling at the fastest rate since February, it’s easy to see why the ECB are considering additional stimulus.”