Global Manufacturing Holds Firm in October as Energy Costs Bite

Global manufacturing activity remained solid in October, but factories are increasingly showing strain from rising energy costs while supply-chain disruptions squeezed margins, according to surveys released Monday. The data point to growing pain for export-led economies as prolonged conflict in the Middle East keeps fuel and food prices high, hitting consumption and business confidence.

S&P Global's Eurozone Manufacturing Purchasing Managers' Index eased to 52.7 last month from 52.9 in September, which was the highest reading since May 2022, but came in above a preliminary estimate of 52.4. Readings above 50 indicate growth in activity. Germany's manufacturing industry expanded solidly in October, while France's slipped back into contraction.

British manufacturers started the final quarter of 2026 with their strongest output growth in more than two years, although fast-rising costs may worry the Bank of England, which looks set to raise interest rates this week. Eurozone input prices rose at their fastest pace since May, and output prices also increased rapidly, reinforcing expectations that inflationary pressures will remain elevated.

Preliminary data due Wednesday is expected to show inflation in the currency union nudging up to 4.0% in October, according to a Reuters poll, keeping pressure on the European Central Bank to raise interest rates as well.

China's picture was more mixed. The RatingDog China General Manufacturing PMI, compiled by S&P Global, stood at 52.0 in October, just below September's 52.1. But China's separate official manufacturing PMI fell to 49.3 from 50.1, returning to contraction, with production and new orders both weakening, a reminder that the world's second-largest economy is still wrestling with soft demand even as Europe's factories hold their ground.