October was strongest month for euro zone factories in
almost seven years: PMI
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[November 02, 2017]
By Jonathan Cable
LONDON Reuters) - Manufacturers in the euro
zone had their strongest month since early 2011 in October as factories
struggled to meet booming demand despite adding staff at the fastest
rate in at least 20 years, a survey showed on Thursday.
"Euro zone factories started the fourth quarter with increased vigour,
with the sector's growth spurt showing no sign of abating," said Chris
Williamson, chief business economist at survey compiler IHS Markit.
Economic growth in the currency bloc was a
faster-than-expected 0.6 percent last quarter and unemployment has
fallen to an almost nine-year low, official data showed this week.
IHS Markit's final manufacturing Purchasing Managers' Index for the bloc
rose to 58.5 last month from September's 58.1. That
was below a preliminary estimate of 58.6 but was its highest since
February 2011 and the second-highest in over 17 years.
An index measuring output, which feeds into a composite PMI due on
Monday, dipped to 58.8 from September's 6-1/2 year high
of 59.2 but remained well above the 50 level that separates growth from
contraction. The flash estimate was 58.7.
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A employee walks along a battery storage in battery factory at
Daimler subsidiary ACCUMOTIVE in Kamenz, Germany May 22, 2017.
In a sign November will also be busy, new order growth accelerated at the
fastest pace since early 2011 while factories built up backlogs of work at the
joint-steepest rate since IHS Markit started monitoring it 15 years ago.
To try to meet growing demand, manufacturers took on staff rapidly, with the
employment sub-index registering 57.3, up from 56.5 and the highest reading in
its 20-year history.
"It's especially encouraging to see employment growing at a survey-record pace
as firms seek to boost capacity in response
to fuller order books," Williamson said.
"Export order growth remains encouragingly solid, suggesting little impact from
the strengthening of the euro this year, and
domestic demand continues to improve across the region."
Robust growth alongside increasing price pressures will be welcomed by
policymakers at the European Central Bank who last
month took a step towards weaning the euro zone off loose money.
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