Euro zone factory growth accelerates again in September, PMI shows
VGK•The euro zone manufacturing PMI rose to 52.9 in September from 52.7 in August, its highest level since May 2022 and above the preliminary estimate of 52.7. New orders and output reached multi-year highs, while input and output inflation accelerated.
1. Growth gains momentum
S&P Global’s Eurozone Manufacturing PMI increased for a third consecutive month to 52.9 in September. New orders grew at their fastest pace since early 2022, helped by export growth at a more than four-and-a-half-year high, while the output index reached 53.6, its highest level in 55 months.
2. Demand and hiring
Growth was broad-based, led by the Netherlands; Germany recorded solid growth, while France, Italy and Spain expanded modestly. Manufacturers resumed modest hiring after ending a more than three-year run of job cuts in August. S&P Global Market Intelligence chief business economist Chris Williamson said demand for investment goods, particularly AI- and defence-related equipment, was driving the upturn.
3. Inflation risks
Input and output inflation accelerated in September. Official data due Friday was expected to show euro zone inflation rising to 3.6% from 3.2% in August, while markets were pricing in three European Central Bank rate hikes by mid-2027. Williamson said falling consumer-goods demand and rising costs could fuel speculation about additional rate hikes.
