Eurozone industry continues to expand in October, but loses pace and feels more cost pressure
The region's PMI drops from 52.9 to 52.7, still above 50, while China continues to expand with exports at a weaker pace.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM INFOMONEY · 2 MIN
Eurozone industry continued to expand in October, albeit at a slightly slower pace. According to InfoMoney, based on data from Reuters, the purchasing managers index (PMI) for the region's industrial sector, calculated by S&P Global, scored 52.7 points in October, compared to 52.9 in September.
Readings above 50 indicate that industrial activity is expanding. In September, the result of 52.9 had been the highest since May 2022, which gives a measure of the slowdown, which is still modest. The preview of the survey for the Euro Zone had indicated 52.4, and the final reading was above this estimate.
The point of attention is the demand. Growth in new orders lost momentum in October. At the same time, rising energy costs and disruptions in supply chains have put pressure on company margins. The survey was released on Monday, November 2.
In China, the industrial PMI, calculated by S&P Global in partnership with RatingDog, was 52 points in October, compared to 52.1 in September. According to Dow Jones, cited by InfoMoney, the reading also indicates expansion, with minimal decline compared to the previous month.
Yao Yu, founder of RatingDog, said China's new export orders grew for the fourth month in a row. He highlighted, however, that the pace of export expansion was the weakest in three months. Yao Yu also mentioned customers in Asia, Europe and Africa.
The combined picture shows a global industry that continues to grow, but with signs of caution: less vigorous orders and input costs putting pressure on profitability.
What changes for the investor
For those who follow exchange rates, interest rates and the stock market, the numbers point to industrial activity that continues to expand, with no sign of contraction. Even so, the loss of momentum in new orders and the pressure on margins deserve attention, as they could limit the performance of European industrial companies in the coming months. This type of indicator is usually read by the market in conjunction with interest rate decisions and inflation data. The reading does not indicate the purchase or sale of assets, nor does it allow predicting the behavior of the dollar, the euro or the stock markets. It is worth monitoring upcoming releases to see if the slowdown in orders is confirmed.
Automatically translated from Portuguese.
