Employment in the Eurozone rose at the fastest pace in a decade in October thanks to an increase in new orders providing a boost to the blocs manufacturing sector, according to figures released on Tuesday. IHS Markit’s composite Purchasing Manager’s Index, which measures the health of the private sector, came in at 55.9, which while lower than the past two months still indicates robust growth. The figure for services was 54.9 with anything over 50 indicating growth. The increase in manufacturing output will be welcomed by policymakers as evidence that the rise in the value of the euro hasn’t hampered overseas orders; indeed thanks to the lengthening backlog of orders employers have taken on employees at the highest rate since 2007. Leading the economic pack in October was France where Emmanuel Macron’s pro-business agenda and determination to break the country’s low growth high unemployment dynamic has boosted confidence among business owners. France’s PMI score rose to 57.5, up from 57.1 in September, marking the biggest rise in output since June 2011. Germany continued to show strong growth despite October’s reading of 56.9 being its lowest in two months. Signs of long-sought-after inflation also made an appearance in the figures with companies posting the highest rise in input costs in six months and passing these costs onto their clients.
Excluding France and Germany the rate of business expansion in the Euro Area was still solid despite posting its slowest growth in a year. The Spanish economy has become a source of worry since the breakdown in relations between Madrid and Barcelona over the disputed Catalonian independence referendum. Since the October 1 vote more than 1,300 companies have moved their legal headquarters out of the region, including its two biggest banks, Caixabank and Banco Sabadell. The Spanish government has warned that a prolonged crisis in the country will affect the economic outlook and cut its growth projections in 2018 down to 2.3 percent from the previous figure of 2.6 percent.