October's euro area manufacturing PMI of 52.7 is propped up by supplier delays and precautionary stockbuilding while output slows. Inflation is diverging by country, the ECB is edging toward a December hike, and Fitch has cut France's outlook to negative.
Euro-area factories remain in expansion for a ninth month even as output cooled, keeping the ECB's hiking debate alive. Source
The final Hamburg Commercial Bank (HCOB) manufacturing PMI for October printed 52.7, up from the 52.4 flash and just under September's 52.9, which was the highest since May 2022. That makes nine straight months of expansion. The composition is the problem. Suppliers' delivery times and stocks of purchases carry about a quarter of the index weight, and longer delays push the reading up. Delays got worse, and firms built inventories by the most since December 2022. Output, meanwhile, eased to 52.8 from 53.6, a four-month low, and total new orders grew more slowly.
