Eurozone manufacturing continues to contract

Posted on: November 4th, 2019 by PhilM

The Eurozone manufacturing sector continued to contract sharply in October. The IHS Markit Eurozone Manufacturing PMI® read 45.9, virtually unchanged from September’s 45.7. 
Investment and intermediate goods sectors both registered marked contractions, although the rate of deterioration in the consumer goods sector remained marginal.
Germany remained the principal source of weakness with a PMI reading of 42.1. Austria recovered slightly to 45.5. Italy recorded a seven-month low at 47.7 but Spain saw its reading (46.8) fall to a six and a half year low. Netherlands (50.3), Ireland (50.7) and France (50.7) barely expanded and Greece recorded a four month low at 53.5. 
Whilst not as severe as September, the key depressor continued to be sharply falling new order volumes. Export orders fell sharply but domestic demand was also weak. As result output and purchasing activities were both cut and backlogs were eroded. Employment levels reduced for the sixth month in a row, particularly sharply in Germany. Input and finished goods inventories were cut. Average input costs fell the most since March 2016 and factory gate prices also fell for the fourth consecutive month. 

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