German factory activity expands steadily in October, PMI shows

BERLIN, Nov 2 (Reuters) - Germany's ‌manufacturing sector expanded ​solidly ​in October as rising export sales and government-linked demand supported output and orders, a business survey showed on ‌Monday.

• The Germany Manufacturing Purchasing Managers' Index (PMI), compiled by S&P ⁠Global, rose to 54.2 in October from 53.9 in September

• The 50 mark ‌separates growth from contraction

• "The ‌recovery in the German manufacturing sector remained on track in October despite a resurgence in cost pressures, underlining a sense of resilience ​in the sector," said Phil Smith, Economics Associate Director at S&P Global Market Intelligence

• Output rose for a 10th straight ⁠month, though the pace eased to its weakest since July. New order growth also softened ​to a three-month low, while export sales grew at a solid and slightly faster pace

• Overseas demand was ​the second-strongest in more than four-and-a-half years, ‌behind only August's recent peak, with firms citing increased sales from Asia, North America and parts of ⁠Europe

• Backlogs of work increased for a third consecutive month, with the pace unchanged from September and still the joint-fastest since April 2022. Employment ⁠fell only fractionally, marking the smallest decline since August 2023

• Cost pressures intensified ​as input price inflation climbed to a five-month high and supplier delivery delays worsened to the greatest extent since May. Output price inflation eased to an ‌eight-month low as competitive pressures limited firms' pricing power

• Manufacturers remained optimistic about output over the coming ‌year, but confidence fell to its lowest since July as sharply ⁠rising costs weighed on sentiment. ‌Firms also raised stocks ​of purchases for the first time in almost four years amid longer lead times

(Reporting by Reuters; Editing by ‌Hugh Lawson)

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