Eurozone manufacturing moves up a gear

Survey data released this morning indicates the eurozone´s recovery remains firmly on track with evidence of growing momentum in the manufacturing sector.

IHS Markit said its eurozone manufacturing PMI survey gauge rose to 58.1 in September versus 57.5 in August.

The figures show that conditions in the eurozone´s manufacturing sector have strengthened by the most in over six and a half years.

Output accelerates

IHS Markit said manufacturing and new orders had expanded across all eight of the eurozone nations covered by its monthly survey.

It also claimed that accelerating output growth and capacity constraints had driven job creation across the eurozone to a survey-record high.

“The eurozone manufacturing boom kicked into an even higher gear in September, with the PMI rising to a level surpassed only once in the past 17 years,” said Chris Williamson, chief business economist at IHS Markit.

Country breakdown

A breakdown of the survey by country shows the strongest manufacturing momentum is currently being found in Germany and the Netherlands, which registered manufacturing PMI scores of 60.6 and 60 respectively.

Italy´s manufacturing PMI gauge was slightly lower than forecast, at 56.3, though was unchanged from the prior month.

France, meanwhile, registered a better-than-expected 56.1.

While still having respectable scores, above the 50 mark that denotes expansion, only Ireland and Austria had a lower tally than the prior month, at 55.4 and 59.4 respectively.

Although still at the bottom of the table in overall PMI terms, Greece saw substantial improvement with its gauge surging to a 111-month high, at 52.8.

Domestic demand and exports

IHS Markit said the overall improvement across the eurozone was supported by growth in new orders, which were underpinned by both robust domestic demand and an upturn in exports.

The stronger readings make it more likely that the European Central Bank will soon announce details of how it plans to rein in its stimulus programme.

Eurozone manufacturing strength has also come despite the strong appreciation for the euro this year against major currencies.