0827 GMT October 15, 2018
In surveys published on Friday, the Dutch manufacturing purchasing managers’ index for November hit a record high, the Italian index reported the strongest new orders in 17 years and Ireland’s the strongest rate of growth for 18 years, FT wrote.
Overall eurozone manufacturing expanded at the second-highest rate on record. The IHS Markit purchasing managers’ index for the currency bloc came in at 60.1. Anything above 50 indicates expansion, a reading beaten only by one survey in April 2000.
But the rise in activity was not limited to the eurozone: British factories were at their busiest in more than four years in November, the Japanese manufacturing PMI, also published on Friday, pointed to the strongest growth for 44 months, and South Korea recorded a 55-month high.
The strong and widespread growth across all major economies has boosted global trade, especially in economies that are heavily integrated in international supply chains, said Ben May, director of global macroeconomics at Oxford Economics.
“Strong global growth, low macroeconomic volatility and access to cheap credit should ensure that this year’s pick-up in investment is more than just a temporary blip,” he said.
The figures point to a shift in the global economy towards self-sustaining growth after a decade of muted investment by businesses, which left advanced economies dependent on extraordinary stimulus measures.
“Good news from latest UK manufacturing PMI,” said Julian Jessop, chief economist and head of the Brexit unit at the Institute of Economic Affairs. “But only fair to point out that the comparable eurozone data are even stronger.”
The UK IHS Markit PMI rose to 58.2 from 56.6 in October, its highest reading since August 2013.
The survey tallies with official UK manufacturing data that have found sharp increases in the production of computers, machinery and other electrical goods in the past year as global capital expenditure steps up a gear after a decade of disappointing growth following the financial crisis.
World trade volumes and business expenditure on jobs and machinery have picked up this year. The World Trade Organization made a strong upward revision to its forecast for 2017 trade growth in September after better activity than expected in the first half of the year.
The International Monetary Fund said the world economy is enjoying the broadest and most rapid period of growth since the start of the decade. In its World Economic Outlook published in October the IMF said increased investment is starting to brighten the long-term picture.
Economists have feared that the UK’s manufacturing sector, while enjoying the competitive benefits of a weaker pound increased global trade, would not invest for fear of losing access to the UK’s biggest export market after Brexit.
Ben Broadbent, deputy governor of the Bank of England, has said the sector is in a temporary sweet spot, enjoying the benefits of devaluation before the UK exits the EU.