The downturn in the Eurozone manufacturing sector extended into a fifteenth successive month in October, as domestic market conditions remained subdued and intra and extra-Eurozone trade flows deteriorated further.
At 45.4 in October, from 46.1 in September, the headline seasonally adjusted Markit Final Eurozone Manufacturing PMI® was slightly above the earlier flash estimate of 45.3.
The downturn not only deepened, but also widened during the latest survey period. Only the Irish PMI stayed above the neutral 50.0 mark, as the Dutch PMI edged back into contraction territory. Rates of contraction accelerated in Germany, Italy, Spain, Austria and Greece. Although the downturn in France eased slightly, it remained stronger than the euro area average.
Manufacturing output declined for the eighth month in a row during October, and at a faster rate than in the previous month. Production fell across the consumer, intermediate and investment goods sectors, with by far the steeper rates of contraction seen in the latter two sectors.
Underlying the latest reduction in output was a further deterioration in new order inflows, as new business declined for the seventeenth successive month. Companies reported that weak domestic demand and declining international trade flows had led to reduced inflows of new business. Of the nations covered by the latest survey, only Ireland saw increases in both output and new orders. New export orders fell for the sixteenth consecutive month in October. The latest decline reflected sharp falls at intermediate and investment goods producers, as export orders for consumer products showed a marginal increase.
Total new exports fell at substantial rates in France, Germany, Austria and Greece. In marked contrast, modest gains were signalled for Ireland, Italy and the Netherlands. Spain saw broadly no change.
(…) Job losses were reported for the ninth successive month, and at the fastest rate since July. However, spare capacity remained present in the sector, as highlighted by a reduction in backlogs of work for the seventeenth month running.
(…) The steepest job cuts were in Greece (fastest since April) and Spain. Staffing levels in Germany and the Netherlands were cut following slight increases in both nations during September, while further job losses were signalled in France, Italy and Austria.
(…) Modest charge reductions were seen in Germany, Italy and the Netherlands, while marked discounting was reported by Spain and Greece. In contrast, selling prices in France rose at the fastest pace since March. Ireland and Austria also reported increases, but at slower rates than in September.