The latest set of manufacturing PMI data from the UK, US and the Eurozone this week confirmed that the rebound in the global factory sector is still on course. Following the move out of nationwide lockdowns three months ago, factory activity has been moving increasingly back into positive territory following record crashes in all three economies over the height of the pandemic.

EZ Manufcaturing Sees Fastest Increase Since August 2018

In the Eurozone, the flash manufacturing PMI was seen rising to 53.7 this month from the prior month’s 51.5 level. This reading beat estimates of a 51.5 reading and also marks the fastest monthly increase in the sector since August 2018. Output growth In manufacturing was seen rising at its fastest level since 2018. The ECB has acknowledged that data has been improving recently though remains cautious given the great deal of uncertainty in the outlook.

UK Manufacturing Weakens From Prior Month

In the UK, the manufacturing PMI rose to 54.3, in line with expectations. However, the reading was slightly disappointing as it marked a decrease from the prior month’s 55.1 reading and raises questions over the recovery in the UK. The UK has seen a great deal of uncertainty over recent weeks with the growing virus rates there leading to a fresh set of restrictions being announced by the UK PM this week. Alongside this, fears that the UK and EU will not agree a trade deal are creating negative sentiment among businesses. Furthermore, with the UK government’s furlough scheme ending there is a high level of concern that the UK will suffer a sharp rise in unemployment in coming months.

US Manufacturing Beats Estimates

In the US the manufacturing reading was seen jumping to 53.5 from the prior month’s 53.1, beating estimates of a fall back to the 52.5 level. Commenting on the data, the IHS (which compiles the release) said: “US businesses reported a solid end to the third quarter, with demand growing at a steepening rate to fuel a further recovery of output and employment. The survey data therefore add to signs that the economy will have enjoyed a solid rebound in the third quarter after the second quarter slump." This latest release means that the US factory sector has grown consecutively each quarter since the low point in March and is now back above where it was pre-virus.

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