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By IB Times Staff Reporter: Subscribe to IB's RSS feed | November 2, 2010 2:25 PM GMT
Data showed on Tuesday German manufacturing output rose sharply in October, boosted by robust growth in new orders, while across the eurozone, manufacturing accelerated for the first time in three months in October.
Purchasing managers' index (PMI) in eurozone’s largest economy rose to 56.6 in October from an 8-month low of 55.1 in September on seasonally adjusted basis, data from Markit showed on Tuesday.
Markets had expected the index to increase to 56.1 in October. Eurozone PMI rose to 54.6 in October after reaching an 8-month low of 53.7 in September.
The output increase in Germany was largely led by growth in new orders that lost momentum in September. Growth in new orders touched a 14-month low in September.
“Manufacturing output increased at a stronger pace in October, led by a rebound in new order growth from the 14-month low seen in September. The headline PMI rose for the first time in three months, but the pace of recovery in the sector remains much slower than April’s peak,” said Tim Moore, an economist at Markit.
However, new export orders growth remained much below the average recorded for the first half of 2010.
Markit said that job creation also picked up sharply in October due to strong increase in output and new business. Capital goods sector created the highest number of jobs in the same month.
“While the recovery may have stepped down a gear towards the latter part of 2010, manufacturing job creation remains relatively strong and continues to outshine the rest of the ‘big-four’ euro area economies,” Moore added.
In eurozone, the expansion in the manufacturing was mainly led by strong increase in output of capital goods.
However, the major economies in the euro area recorded much stronger growth rates in output than other nations. While France and Germany led the growth in total new orders in October, Greek manufacturing production fell at the fastest pace since June.
“Despite the overall improvement, national divergences will continue to raise tensions for policymaking. Although Greece was the only country to see manufacturing output decline, production continued to barely rise in the Netherlands, Ireland and Spain, contrasting with strong growth in Germany, France and Italy,” said Chris Williamson, chief economist at Markit.
The rate of jobs growth in October in the Eurozone’s manufacturing sector was the fastest since March 2008, Markit said.
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