Manufacturing growth in the euro zone in October has fallen to its slowest pace in 10 months. That is according to the October survey of purchasing managers from around 3,000 companies carried out by Reuters. The strong demand from China that has been helping fuel the global economic recovery is expected to soften as Beijing moves to stop the economy overheating there. China’s needs have pushed up oil prices and that is one of the major factors.
The economists who carried out the purchasing managers’ survey said they “suspect this is an oil price induced global downturn which is hitting export growth.” The strong euro has also hurt exporters in continental Europe. The single European currency last week reached its highest level against the dollar in eight months. It has appreciated about 4.5% since the beginning of September, reinforcing fears about the fragile recovery in the euro zone, which is very much dependent on exports.