factorygrowthWorld News

Euro zone factory growth strong in Sept but bottlenecks bite


Investing.com - Financial Markets Worldwide

Please try another search

ReutersEconomic Indicators22 minutes ago (Oct 01, 2021 04:10AM ET)

Euro zone factory growth strong in Sept but bottlenecks bite

LONDON (Reuters) – Euro zone manufacturing growth remained strong in September but activity took a big hit from supply chain bottlenecks that are likely to persist and keep inflationary pressures high, a survey showed on Friday.

Factories have struggled with logistical issues, product shortages and a labour crunch brought about in large part by ongoing disruptions caused by the coronavirus pandemic which forced governments to impose strict restrictions on mobility.

IHS Markit’s final manufacturing Purchasing Managers’ Index (PMI) sank to 58.6 in September from August’s 61.4, and just below an initial 58.7 “flash” estimate.

An index measuring output, which feeds into a composite PMI due on Tuesday and is seen as a good guide to economic health, dropped from August’s 59.0 to 55.6. Anything above 50 indicates growth.

“While euro zone manufacturing expanded at a robust pace in September, growth has weakened markedly as producers report a growing toll from supply chain headwinds,” said Chris Williamson, chief business economist at IHS Markit.

“Supply issues continue to wreak havoc across large swathes of European manufacturing, with delays and shortages being reported at rates not witnessed in almost a quarter of a century and showing no signs of any imminent improvement.”

Those bottlenecks kept pressure on the costs of the raw materials factories need. The input prices index only nudged down from August’s 87.0 to 86.9.

However, factories passed some of those increases to customers and the output prices index approached the record high seen in the summer.

Inflation in the euro zone likely rose to 3.3% last month, preliminary official data is expected to show later on Friday, well above the European Central Bank’s 2.0% target.

Despite rising inflation the ECB will trim emergency bond purchases over this quarter, it said last month, taking a first small step towards unwinding the emergency aid that has propped up the bloc’s economy during the coronavirus pandemic.

Related Articles

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

tp

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Close
Close