Manufacturing sector in the Euro area slows; South Korea's inflation up to a near 10-year high: Economic wrap
Eurozone’s manufacturing PMI recorded 58.3 in October, edging down slightly from September's 58.6. This is the lowest reading in eight months as supply chain disruptions in the region gather pace.
Chris Williamson, Chief Business Economist at IHS Markit, said: “Eurozone manufacturers reported a worsening of the supply chain situation in October, which curbed production growth sharply during the month.”
Both production schedules and order books slowed this month. Firms also experienced significant delays for their purchases as delivery times almost reached record highs.
Countries that underwent the highest improvements in their manufacturing sector were the Netherlands, Ireland and Italy.
Germany experienced its lowest level of manufacturing activity in 9 months. The index reached 57.8 in October as the sector grappled with supply disruptions and material shortfalls.
Similarly, France’s manufacturing PMI decreased to 53.6 percent in October down from 55 in September due to inadequate input stocks.
South Korea's inflationary pressures
Korea’s annual inflation rate went up by 0.7 percent to 3.2 percent in October, reaching a near 10-year high, according to official data. This is compared to September’s 2.5 percent.
This was driven by soaring petroleum prices, which rose by 27.3 percent. Transport and communication costs similarly surged at annual rates of 10.4 percent and 13.1 percent respectively.
The yearly inflation rate remains higher than the central bank's 2 percent target for the seventh consecutive month.
Looking at monthly data, consumer prices have inched by 0.1 percent in October, easing from the previous month’s 0.5 percent.
The country’s annual core inflation rate, which excludes movements in volatile items such as food and energy products, increased to 2.4 percent in October, up from 1.5 percent in September. This is the highest level since December 2015.
Japan’s inflation target remains unchanged
Japan’s economy and finance ministers and the Bank of Japan’s chief decided to keep the country’s inflation rate target unchanged at 2 percent in a meeting held on Tuesday.
There were some speculations, before the meeting, that a change in inflation target could take place as prices in the country remain weak.
South Africa’s factory activity
The seasonally adjusted Absa Purchasing Managers’ Index for South Africa decreased to 53.6 percent in October down from 54.7 percent in the previous month of this year, but still continuing its expansionary trend for the third consecutive month.
Meanwhile, business activity and new orders fell in the month, partly due to strikes in the steel and engineering sectors.