The euro zone's manufacturing sector expanded at its fastest pace in over a year in October to reach a 13-month high, figures showed today.
The RBS/NTC Research Eurozone Purchasing Managers' Index climbed one point to 52.7 in October, slightly beating a forecast of 52.6 and moving further above the 50 waterline between contraction and growth.
The better environment enabled firms to raise their prices a little, passing on some of the extra costs from more expensive oil and raw materials.
Any sign of high oil costs filtering through into other prices, along with any evidence of improving economic growth could prompt the European Central Bank to raise rates sooner than previously expected.
The new orders index rose to 54.3 - its highest level since August 2004 - from last month's 53.2. Companies in the survey said a weaker euro had made it easier to compete on price in foreign markets, but they mostly attributed the improvement to robust global demand.
In the euro zone, the influx of orders enabled manufacturers to crank up output to its fastest pace in 13 months, though this was still not enough to meet the increased demand.
The stocks of finished goods index slipped to 46.3, its lowest level since September 1999, and the backlogs of work gauge hit a 14-month high at 52.5.
The employment index rose to its highest level since May 2001, though at 49.9 it still signalled that overall, companies shed more staff than they recruited for the 53rd month in a row.