Eurozone factory output commences growth again
EUROZONE factory output expanded for the first time since May 2008 in October, the CIPS/Markit purchasing managers’ index confirmed yesterday, raising hopes that the longest and deepest downturn in decades is now at an end.
Although slightly below the preliminary reading, the PMI for firms in the Euro bloc indicated the strongest monthly expansion since January 2008 but the survey noted that output disparities widened in the single currency area.
French manufacturers reported a further marked acceleration in output growth to outperform all other states in the Eurozone by a wide margin. Germany saw the second strongest growth, followed closely by Austria and the Netherlands.
European officials had worried that a stronger euro would harm European exporters’ competitiveness and this was borne out by the slowing pace of growth in new export orders in October. However, large exporters such as Germany and France both saw robust export order growth.
But Howard Archer at IHS Global Insight said: “For sustained, robust manufacturing expansion to occur, there needs to be extended healthy growth in orders from both domestic and foreign markets and this currently remains far from certain – particularly once fiscal stimulus measures start to be withdrawn.”