Eurozone factory PMI cools in October, price pressures keep ECB on alert

• The final eurozone manufacturing PMI for October came in at 52.7, up from a preliminary reading of 52.4.
• September's reading had been 52.9.

October saw euro area factory activity ease a little, leaving the main PMI gauge at its weakest in two months. The output sub-index declined again, falling to 52.8 from September's 53.6 and hitting a four-month low. Even so, the latest numbers still point to a gentle expansion in manufacturing, notwithstanding softer growth in new orders and greater strain on supply chains.

France and Italy were the biggest laggards, diverging from the wider regional upturn. Both economies recorded fresh month-on-month declines.

For France, home-grown political uncertainty continues to weigh on the bloc's second-biggest economy. That poses a significant concern, with possible knock-on effects for the rest of the region spanning borrowing costs, fiscal risks and uncertainty.

Supplier-side difficulties were still widespread in October, as average vendor delivery times stretched the most since June. Shipping delays notwithstanding, businesses managed to build up their input inventories over the survey period, something that had last happened in December 2022.

Cost pressures also accelerated sharply, with input prices climbing at the fastest rate since May. That marked a second straight monthly pickup in inflation.

Consequently, the European Central Bank has little room to relax before its December meeting: inflation remains a persistent problem for officials even as worries mount about a broader eurozone downturn.