Nonetheless, the PMI has recorded above the crucial 50.0 threshold in each month since November 2013.
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There’s a “tentative suggestion that the manufacturers are pulling out of their recent funk”, said Rob Dobson, a senior economist at Markit.
“The big question now is whether this bounceback is a one-off or the start of a sustained re-emergence from recession”, he added.
New business from foreign clients has declined in every survey period since September 2013, the report showed. While the uptick may well be a consolation for policy makers concerned with weaker global trade and too-low inflation becoming entrenched, it risks being too small to put the region’s fragile recovery onto a more solid footing. Stronger trends in output and new-order components were largely responsible for the upward revision of the euro-area gauge, Markit said.
‘Investments in new and emerging technologies will become essential to deal with this, increasing the efficiency of production output’.
Its Purchasing Managers’ Index (PMI), which tracks activity in factories and workshops, came in at 48.3 last month.
“With the Fed eagerly watching the data flow to see whether the third quarter economic slowdown will intensify, the improvement in the manufacturing sector increases the odds of policymakers voting to hike rates at the FOMC’s December meeting”.
The survey contrasts with a few other measures of the economy.
The pound jumped after the report and was up 0.3 percent at $1.5479 as of 10:44 a.m.in London.
Yet despite the brighter picture it paints of the economy, the survey may do little to change the likelihood of the Bank of England keeping interest rates unchanged for a while yet.
“Companies in the supply chain are waiting for next-generation applications and features to drive growth next year”, Lai said. The NBS survey pointed to weaker export orders and further layoffs. Total new business placed at Chinese goods producers declined for the fourth month in a row in October. “This slower growth is more consistent with the slowing economic activity and overall energy demand growth…Fundamentals suggest moderate demand ahead”, the bank said in a report. The dollar was after the BOJ on Friday incorrect-footed investors who had wagered on the Japanese central bank lifting the greenback and easing policy.
European shares are expected to open weaker, with spread-betters looking for Germany’s DAX .GDAXI to fall 0.8 percent, France’s CAC 40 .FCHI to drop 0.9 percent, and Britain’s FTSE .FTSE to start 0.6 percent down.
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The report comes back on the announcement that the manufacturing PMI in the Eurozone rose unexpectedly last month which is being seen as a huge positive. As has been the case since July, Chinese manufacturers cut back on their purchasing activity in October.
