The S&P Global purchasing managers' index for the euro zone manufacturing sector rose for a third straight month to 52.9 in September, from 52.7 in August, reaching its highest level since May 2022 and exceeding the initial estimate of 52.7.
A reading above 50.0 indicates growth in activity, with strong demand pushing new orders and output to their highest levels in years despite the ongoing conflict in the Middle East.
Artificial intelligence and defence support demand
“This recovery is being driven by rising demand for investment goods such as machinery and equipment, with production of these capital goods growing in September at a rate not seen since the post-Covid-19 recovery five years ago,” said Chris Williamson, chief economist at S&P Global Market Intelligence.
“This reflects increased demand related to artificial intelligence and defence-related equipment in particular,” Williamson added.
Exports and output boost business confidence
New orders recorded their fastest growth since early 2022, supported by export growth that reached its highest level in more than four and a half years.
The output sub-index rose to its highest level in 55 months, at 53.6, supporting business confidence and business activity, which reached their strongest levels since February.
