Eurozone manufacturing activity slows to 8-month lows due to supply problems

The growth in activity of companies in the manufacturing sector in the euro zone slowed down in October to its lowest level in the last eight months as a result of the impact of problems in supply chains, as reflected in the Purchasing Managers Index (PMI), which stood at 58.3 points, compared to 58.6 in September, reported IHS Markit.

Among the countries analyzed, the fastest growing manufacturing sectors in October were the Netherlands, Ireland and Italy, which accelerated their expansion in October, while those with the slowest growth rate were France, Spain and Germany.

"Euro-zone manufacturers reported that the supply chain situation worsened in October, dramatically limiting production growth during the month."said Chris Williamson, Markit’s chief economist.

Supply and shortage problems caused the average delivery times of inputs to be drastically lengthened in October, with the third-strongest rate of delays in the entire historical series, dating back to 1997 and exceeded only by those observed in May and June. past due to low availability of containers, widespread shortages of components and raw materials, and problems with transportation.

These difficulties also began to affect demand, slowing down the increase in order books during the month of October, when the increase in new orders was the weakest since last January.

As a result, inflationary pressures intensified throughout the euro zone, with both sales and purchase prices rising at new record rates in October.

"Business confidence also lost some ground to its 12-month low in October, as an increasing number of producers are concerned about the supply situation and the impact of rising costs and prices, adding to that to signs that manufacturers have some difficult months ahead", Williamson added.

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