Eurozone adds jobs at strongest pace in over one decade
Staff Writer |
The recent strong growth of the euro area economy was maintained at the start of the final quarter of the year, driven by another marked improvement in new orders.
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Rising workloads encouraged firms to take on extra staff at the sharpest pace in over a decade.
The headline IHS Markit Eurozone PMI posted 55.9 in October, according to the preliminary flash estimate based on approximately 85% of final replies, down from 56.7 in September.
While output growth eased slightly, it remained sharp and broadly consistent with the trend seen over 2017 so far.
Firms were buoyed by further strong new order inflows.
In fact, new business increased at the same pace as seen in September.
Output growth in the manufacturing sector continued to outpace that of services, with both seeing slightly weaker rises than in the previous month.
Manufacturers also recorded a faster rise in new orders than their service sector counterparts, with the rate of expansion at a four-month high.
The strong performance of manufacturing partly reflected higher new export orders, with export growth picking up from that seen in September.
A key highlight from the latest survey was a sharp and accelerated rise in employment across the private sector.
Moreover, the rate of job creation was the strongest in over a decade.
Service providers took on extra staff to the greatest extent in seven months, while manufacturing jobs growth was the strongest since data collection began in June 1997.
Job creation reflected further evidence of pressure on capacity, with backlogs of work increasing solidly again during October.
Meanwhile, the manufacturing sector saw suppliers’ delivery times lengthen to the greatest extent in 80 months amid pressure on supply chains.
In line with the trend in output, business confidence eased in October following September’s four-month high.
Reduced optimism was recorded across both the manufacturing and service sectors, although in each case companies remained strongly confident regarding the 12-month outlook for business activity.
Inflationary pressures continued to build at the start of the fourth quarter.
Companies posted the fastest rise in input costs in six months, with both the manufacturing and service sectors seeing sharper rates of inflation in October.
Further improvements in demand meant that firms were often able to pass rising cost burdens on to their clients.
As a result, output price inflation accelerated for the third month running and was the sharpest since June 2011.
As was the case with input prices, charges increased at sharper rates across both monitored sectors. ■