Eurozone manufacturing showed mild signs of stabilization in October, with PMI Manufacturing index finalizing at 46.0, up from September’s 45.0. This marks a slight improvement, but activity remains firmly in contraction.
By country, Spain led the group with a PMI Manufacturing of 54.5, a 32-month high, followed by Ireland at 51.5 and Greece at 51.2. In contrast, the Netherlands and Austria reported significant declines, with PMIs at 47.0 and 42.0 respectively. Germany saw a modest rise to 43.0, marking a three-month high but still in contraction territory, while France’s index held steady at 44.5, a two-month low.
Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, commented that while the manufacturing recession “did not deepen further” in October, challenges persist. Production and new orders both declined at a slower rate, leading to a Q4 GDP nowcast indicating a -0.1% contraction in industrial output.
The environment remains “deflationary,” benefiting purchasing departments with lower input costs but intensifying competitive pressures, particularly with firms passing on price reductions to customers. De la Rubia noted that this “fierce competition,” likely amplified by competition from China, is squeezing profit margins across the sector.
