France is leading what appears to be a eurozone bounce-back in manufacturing.
The French manufacturing sector expanded in October, according to HIS Markit data released on Wednesday. The Purchasing Managers’ Index (PMI) rose to 50.7 points in October from 50.1 in September. Anything above 50 shows growth.
The eurozone’s second-biggest economy, France, saw its fastest growth since June in October, despite a globally unstable business environment, defying forecasts of a slowdown in the third quarter. The Purchasing Managers’ Index (PMI) for services rose to 52.9 points in October from 51.1 in September, indicating continuous growth.
According to a separate set of data released by Germany’s Federal Statistical Service on Wednesday, German industrial orders rose by 1,3% in September, outperforming projections, and creating expectations of a bounce back from Europe’s biggest industrial power.
Germany’s export-reliant manufacturers have suffered from the Sino-American trade dispute as well as continued uncertainty over Brexit. Like France, the German apparent recovery of the manufacturing sector is driven by domestic orders. Domestic orders rose by 1.6% while contracts from abroad were up 1.1%. However, orders from the eurozone were down by 1.8%.
The German economy shrank by 0.1% in the second quarter of 2019 and recent data pointed to continued weakness in the third quarter, which would signal two straight quarters of contraction or a technical recession.