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Eurozone manufacturing sector sees strongest growth in over two years

Eurozone manufacturing sector sees strongest growth in over two years

Mubasher: The IHS Markit Eurozone Manufacturing PMI recorded 53.7 in September, up from 51.7 in August, reflecting the strongest growth in the eurozone manufacturing sector in over two years.

The September PMI showed that Europe's manufacturing activities have seen an improvement in operating conditions for three consecutive months, according to a press release on Thursday.

The consumer and intermediate goods categories have achieved solid gains in September, but they lagged investment goods which saw the strongest upturn for over two years.

The growth in the manufacturing industry was driven by the relative recovery of export trade, but this upswing has not ended job layoffs as manufacturers have sought to reduce their costs amid the uncertain near-term outlook.

However, September recorded the weakest drop in employment rates since February and slower than in recent months. 

As for the prices, inputs registered marginally higher costs, except for some countries, including Germany where a noticeable decrease in prices was witnessed.

Germany led the upturn in the regional manufacturing activity, with the PMI hitting its highest level for 26 months, while France and Austria saw modest growth.

Meanwhile, Spain registered only slight production growth, while Greece saw no change and Ireland’s manufacturing recovery stalled.

Chief Business Economist at IHS Markit, Chris Williamson, said: "The eurozone’s manufacturing recovery gained further momentum in September, rounding off the largest quarterly rise in production since the opening months of 2018."

Williamson concluded: "Without a more broad-based recovery, the sustainability of the upturn looks at risk, with additional worries fuelled by rising Covid19 infection rates."