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Manufacturing Improves Again in Europe, But Services Will Suffer Further

The revisions for the manufacturing in Europe were positive for October

Skerdian Meta•Monday, November 2, 2020•2 min read
Manufacturing keeps improving in Europe

The services sector has dived into contraction in Europe since August, as the economy slows down again, and it is expected to get worse as the new COVID-19 restrictions increase. But, manufacturing is keeping up the pace of the recovery at least, and today’s revisions for October are showing further improvement.

German Final Manufacturing Reading

  • Germany final manufacturing PMI October 58.2 points vs 58.0 expected
  • Initial manufacturing PMI was 58.0 points

 

A slight positive revision to what is already an impressive print for Germany last month. Factory activity continues to bounce back, as new orders show a record increase since the survey began in 1996. Outside of Germany, the two-paced economy across the region is less profound, with the latest virus restrictions set to weigh more heavily on the services sector in the month ahead.

 

Markit notes:

“Manufacturing in Germany continued to bounce back strongly in October. The standout data point was the survey’s measure of new orders, which reached an all-time high on the back of a revival in demand, both domestically and internationally.

“Less positively and perhaps a sign that growth could be about to slow, as more firms get back to pre-COVID levels of output, we saw the first setback to manufacturing expectations for seven months in October. It comes amid rising numbers of coronavirus cases in Europe, and the increased threat of renewed disruption to supply and demand that comes with it.

“Inflationary pressures have started to return to the manufacturing sector, with October seeing the first – albeit slight – increases in both input costs and output prices since the first half of 2019. Demand conditions across manufacturing and its supply chain look to be returning to something that resembles ‘normal’, so more firms have started to up prices.”

French Final Manufacturing Reading

  • Final manufacturing PMI October 51.3 points vs 51.0 expected
  • Initial manufacturing PMI was 51.0 points

Italian Final Manufacturing Reading

  • Final manufacturing PMI October 53.8 points vs 53.9 expected
  • Initial manufacturing PMI was 53.2 points

Eurozone Final Manufacturing Reading

  • Final manufacturing PMI October 54.8 points vs 54.4 expected
  • Initial manufacturing PMI was 54.4 points
ABOUT THE AUTHOR See More
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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