Eurozone Manufacturing Activity Gathers Momentum

(RTTNews) - The euro area manufacturing activity strengthened in September as production and new orders grew at their sharpest rates since early 2022, final survey results from S&P Global showed Thursday.

The final manufacturing Purchasing Managers' Index rose to 52.9 in September from 52.7 in the previous month.

According to the flash estimate, the index remained unchanged at 52.7 in September. The final reading was the highest since May 2022 and was strong by historical standards.

New orders, output, employment, suppliers' delivery times and stocks of purchases continued its upward trend. Underpinned by export orders, new orders rose the most since March 2022.

Backlogs of work increased for the first time since April. Moreover, the pace of accumulation was the sharpest in almost four-and-a-half years. Factory employment ticked up again, in contrast to the trend of decline seen in the three years to July.

Buying activity was the second-quickest since May 2022 and led to a notably slower rate of depletion in firms' stocks of inputs. Pre-production inventories were down only marginally. There was further marked lengthening in delivery times from vendors. Confidence among manufacturers rose to a seven-month high and moved further above its long-run average.

Regarding prices, the survey showed that inflationary pressures intensified in September. For the first time in four months, input and output costs rose at sharper rates.

It is worrying to see both input costs and selling prices rising at increased rates again in September, which will fuel speculation about additional rate hikes from the European Central Bank, S&P Global Market Intelligence Chief Business Economist Chris Williamson said.

The survey showed that all eight of the euro area countries covered by the survey were in expansionary zone in September, for the first time in more than four years.

Germany's manufacturing sector logged sustained growth in September despite the renewed inflationary pressures. The final factory PMI registered 53.9 in September, which was above the flash estimate of 53.8 but slightly down from August's 51-month high of 54.3.

France's manufacturing growth moderated in September amid falling new orders, inventory pullbacks and weak expectations. The factory PMI dropped to 50.6 from 51.1 in August. The flash score was 50.3.

Spain's manufacturing activity rebounded in September as output rose for the first time in four months. The factory PMI climbed to 51.0 from 49.5 in the previous month. The reading was well above forecast of 50.2.

Italy's operating conditions stabilized in September amid moderate reductions in output and new orders. The manufacturing PMI rose more-than-expected to 50.4 from 49.6 in August. The score was seen at 50.1.