Euro zone manufacturing PMI hits six-year high

Manufacturing continued to strengthen in April with the flash Markit Purchasing Managers’ Index for the euro zone reaching 56.8, as output, new orders and employment all rose at the quickest rate in six years.

Steel demand has been slow and steady of late with service centers not active in the booming automotive sector noting the tendency of end-users to hold off from purchasing. However, it would appear that the wider manufacturing sector is going from strength to strength which should indicate demand for steel will improve.

At 56.8 the index was up on the 56.2 recorded in March despite input prices remaining elevated. Markit noted growth in all of the monitored countries except Greece (48.2). Germany recorded the strongest growth with its PMI of 58.2 well in excess of the 50 mark of stability. Austria (58.1), Netherlands (57.8), Italy (56.2), France (55.1), Ireland (55.0) and Spain (54.5) also achieved good results.

“Companies are benefitting from the historically weak euro, improved growth in key export markets, rising domestic demand and ongoing central bank stimulus including record-low interest rates,” according to Chris Williamson, economist at IHS Markit.

Brexit also appears not to have had a huge impact in the UK where the manufacturing PMI of 57.3 was a three-year high. The stronger global market conditions, combined with a significantly devalued sterling, continued to benefit exports, while manufacturers have seemingly been able to pass on increased input costs to their customers.

Peter Brennan, PLATTS