Euro zone factory growth sank to its slowest pace in over two years in October, led by a sharp slowdown in Germany and a contraction in Spanish manufacturing, final figures from a key monthly survey showed on Friday.
The euro zone manufacturing purchasing managers index (PMI) was confirmed at 51.5, unmoved from the flash estimate and the consensus forecast and at its lowest since August 2005.
While still above the 50 mark that divides growth from contraction, Germany saw its sharpest monthly slowdown since its survey started in early 1996, with its factory PMI falling more than three points to 51.7.
The Spanish factory PMI showed contraction, at 49.6, for the first time since June 2005.
Slower demand from within the euro zone as well as elsewhere, alongside a euro at all-time highs against the dollar were the principal factors holding back growth, the survey showed.
The data support the majority view of economists, who see the European Central Bank keeping interest rates on hold through 2008.
Manufacturing output growth sank to its slowest pace since August 2005 in October at 52.6, although this was a touch higher than the 52.5 reported for the flash estimate.
New orders and export orders indexes were also revised up 0.1 point each higher from the flash estimate to 50.7 and 51.4 respectively, though still at a level not seen since May 2005.
Inflationary pressures also eased slightly in October, though remained at high levels, with the input prices index revised up to 59.0 from 58.9 but below September's 59.6.
The output prices index, still at its lowest since January 2006, was revised up to 53.2 from 53.1.
Official euro zone data showed that inflation hit 2.6% in October, well above the 2.3% expected by economists, and the ECB's 2% ceiling.
