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

“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