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Euro zone Factory Growth Remained Solid in September as Bottlenecks Bites

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Euro zone manufacturing growth remained elevated in September as activity plunged from supply chain bottlenecks that are likely to persist and maintain inflationary pressures high.

Source: IHS Markit.

Euro Stoxx 50 down -0.095%, EUR USD up +0.19%

Factories have suffered from logistical issues, product shortages, and labor challenges brought about largely by ongoing disruptions caused by the COVID-19 pandemic that forced governments to put up strict restrictions on mobility.

IHS Markit’s final manufacturing PMI plunged to 58.6 in September from August’s 61.4, and just below the initial 58.7 “flash” estimate.

An index measuring output that links into a composite PMI and is seen as a good measure for economic health declined from August’s 59.0 to 55.6.

Chris Williamson, chief business economist at IHS Markit stated that euro zone manufacturing grew at a robust pace in September as growth weakened as producers post a growing concern from supply chain disruptions.

Williamson further reported that supply issues continue to hamper European manufacturing activities, with delays and shortages being reported at rates not reported in the last 25 years.

Supply chain bottlenecks contributed to the increase in raw materials needed in the factories. The input prices index edged down from August’s 87.0 to 86.9.

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