Stronger-than-expected Rise In Eurozone Private Sector Output, Industrial Orders
10/23/2009 9:48 AM ET
(RTTNews) -
Eurozone private sector output rose at its fastest pace since December 2007 with the manufacturing sector expanding for the first time in seventeen months and services sector maintaining growth. A separate report showed that industrial order growth topped economists' expectations.
The flash Eurozone composite output index, a weighted average of the manufacturing output index and the services business activity index, rose to 53 in October from 51.1 in September, data released by the Markit Economics showed Friday. The index registered an increase for the third successive month and the strongest monthly gain since December 2007. Economists had expected a reading of 51.6. A reading above 50 indicates expansion in the sector.
The manufacturing purchasing managers' index or PMI showed a flash reading of 50.7, up from 49.3 in September, the first increase in seventeen months. Economists had forecast a reading of 50. Manufacturing output increased for the third month running, with the rate of growth accelerating to the fastest since November 2007.
Meanwhile, service sector activity rose for the second month, expanding at the sharpest rate since February of last year. The flash services PMI grew to 52.3 from September's 50.9.
"Another increase in the preliminary PMI data refutes all pessimists and shows that the economy should have continued growing at the start of the fourth quarter," Carsten Brzeski, Senior Economist at ING said. "Today's numbers confirm that the good vibes could keep on going for a while." However, the economist warned that downside risks remain. The strong euro exchange rate has joined a worsening labor market and credit crunch issues as the most prominent impediments to a Eurozone recovery.
New orders to Eurozone private sector rose for the second month running, driven primarily by manufacturing, where new orders showed the strongest gain since August 2007. Despite the recent strength of the euro, new export orders showed the largest rise since January 2008, but the rate of growth remained very subdued. Higher levels of new business were reported for the second month running in services, with growth hitting a twenty-month high.
Employment fell for the sixteenth successive month, but the rate of job losses eased compared to September. Both manufacturing and services saw reduced rates of job losses, though the former continued to see the sharper rate of job shedding. Backlogs of work fell for the nineteenth month, indicating that spare capacity persists and headcounts are likely to fall further in the near future.
1
2
Next Page
|
|