Eurozone PMI reaches 10-month high in October, driven by German growth
Eurozone business activity expanded at its fastest rate of 2016 in October, new data out today shows.
The growth was driven by orders books and an acceleration in the pace of hiring, according to IHS Markit’s Eurozone flash composite Purchasing Managers’ Index (PMI).
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The PMI figure came in at 53.7, a 10-month high and up from 52.6 in September, on a reading where scores above 50 mark expansion.
The growth came despite the index recording the "largest increase in prices charged for over five years".
Germany led the expansion, with manufacturing enjoying a large upturn in production.
“The Eurozone economy showed renewed signs of life at the start of the fourth quarter, enjoying its strongest expansion so far this year with the promise of more to come,” said Chris Williamson, chief business economist at IHS Markit.
“With backlogs of work accumulating at the fastest rate for over five years, business activity growth and hiring look set to accelerate further as we head towards the end of the year.”
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He added:
Policymakers will be encouraged by signs of both stronger economic growth and rising price pressures, and the prospect of a robust fourth quarter will fuel further speculation of a possible tapering of quantitative easing purchases by the European Central Bank.
Not only are average charges increasing at the steepest rate for just over five years, but October also saw the extent of manufacturing supply chain delays hit one of the highest in five years. Increasingly widespread delays suggest demand is outstripping supply for many goods, something which is usually soon followed by rising prices and investment in additional capacity.