Latest data from Markit pointed to another sharp rise in output per worker across the European Union. Highlighting the scale of growth, the headline EU Productivity PMI posted 55.6 in October, up from 54.9 in September, to signal a rate of expansion that was the greatest since April 2004. Three of the EU’s four largest economies recorded productivity gains during October. Manufacturers again recorded a faster rise in output per head than service providers, although the differential narrowed.

 

Broken down by nation, France registered the strongest overall productivity gain during October. Furthermore, the rate of increase was the fastest in the 11.5-year series history.

 

U.K.-based private sector firms recorded the second-fastest monthly rise in output per employee during October, and at a pace that was the fastest since data were first collected in January 1998. Mirroring the trend throughout the European Union, manufacturers were generally the better performers.

 

German private sector companies also saw their output-to-labor ratio increase during October, albeit at a marginally weaker pace than recorded in the previous survey period. While German manufacturers recorded the steepest rise in output per head of the big-four, service sector productivity rose at only a fractional pace. This resulted in only a modest overall rise.

 

Italy was the only big-four EU nation to see a decline in output per employee during October. Nevertheless, the rate of contraction was the weakest since January 2008. The overall decline was again centered on the service sector, with Italian manufacturers recording a modest rise in labour productivity.

 

On a sector level, latest data pointed to a broad-based rise in output per worker across the European Union. For the third month in a row, twenty-two of the twenty-three monitored industries recorded productivity gains during October. Highlighting the ongoing strength of the manufacturing sector, five of the top six performers were goods producers.

 

The Autos sector topped the productivity growth table in October, extending this sequence to six months, as government scrappage incentives continued to boost production in the industry. The Chemicals sector recorded another strong rise in output per employee, albeit at a fractionally weaker pace than the series-record seen in September.

 

The only industry to record a decline in labor productivity during October was Healthcare. This extended the current period of decline to six months.