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Factory PMIs show global economy is on a roll

Monday, October 02, 2017 - 01:44

Factories across the euro zone enjoyed their most productive month since early 2011 in September, surverys showed. As Sonia Legg reports, factory PMIs from China and Japan also suggested the global economy was continuing at a healthy pace.

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Back on track and accelerating - factories across the euro zone enjoyed their most productive month in more than six years. And there are no signs of hold ups further down the line either - new order growth looks set to continue into October. IHS Markit's final manufacturing PMI climbed above 58 - well over the 50 mark that indicates growth. (SOUNDBITE) (English) NEIL WILSON, SENIOR MARKET ANALYST, ETX CAPITAL, SAYING: "Accommodative monetary policy is really helping companies to expand and really it's just yet more evidence that the European economy is moving forward at a healthy clip and that will allow the European Central Bank to begin tapering is this month." Even Italian manufacturing activity expanded at the same strong rate as the month before, suggesting the country troubled by a recent banking crisis will post firm growth in the fourth quarter. (SOUNDBITE) (English) NEIL WILSON, SENIOR MARKET ANALYST, ETX CAPITAL, SAYING: "One or two weak spots, Austria and Ireland were not particularly special, Greece in particular was very strong coming from quite a low base obviously. But generally speaking we've got the German and French, the big economic powerhouses, performing as well as we might expect them." It was a similar story in Asia. In the last quarter Japan's big manufacturers were their most confident about the outlook in a decade. Policymakers there are hoping robust global demand will boost wages and household spending, helping accelerate inflation. China's manufacturing activity grew too - at its fastest pace since 2012. Factories took advantage of strong demand and high prices, easing worries of a slowdown ahead of a key political meeting next month. Britain is watching with envy Its manufacturing fell below 56 under pressure from higher costs. It means the Bank of England may be more likely to raise interest rates next month, even though Brexit uncertainties continue.

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Factory PMIs show global economy is on a roll

Monday, October 02, 2017 - 01:44