Manufacturing activity in the euro zone picked up last month as demand increased from both within and outside the currency bloc, driving factories to increase headcount, a survey shows. As Sonia Legg reports, German manufacturing growth accelerated to a three month high.
In theory production lines in the euro zone should all be rolling along nicely. The conveyor belts have been well-oiled by the European Central Bank. But the latest survey of manufacturing across the region has again disappointed some. (SOUNDBITE) (English) CMC MARKETS ANALYST, JASPER LAWLER, SAYING: "Patchy to be honest, there are some areas of the euro zone that are holding up well, others not so well. Greece for example - we hoped it was going to begin its recovery because of the bailout package, but instead it has fallen back into recession." Growth in Spain, Italy and Ireland was far weaker than earlier in the year. And it declined in France. The recovery was once again centred on Germany, which saw rising demand from both inside and outside the bloc. It helped boost Markit's manufacturing PMI for the euro zone by almost one point. (SOUNDBITE) (English) CMC MARKETS ANALYST, JASPER LAWLER, SAYING: "Again it's that continuing story of a slow improvement in the euro zone economy but not fast enough to weather any storms should they come. That's one of the big worries we had last week around the banking sector last week." New factory orders offered some hope to those looking for positives. They jumped two points, registering one of their highest readings for a year. The ECB will take comfort from the fact that the upturn came despite firms only trimming prices by the smallest of margins. And - factories accelerated hiring. Unemployment - in the peripheral countries in particular - has been one of the region's biggest problems for the best part of a decade.