Manufacturing PMI Re-enters Contraction In October

The Norway October manufacturing PMI re-entered contractionary territory at 47.9 (vs a downwardly revised 51.8 prior). This continues the downward trajectory of the index seen since the 2023 peak of 56.5 in July. Today's data is unlikely to have any impact on the Norges Bank policy decision tomorrow where the previous guidance suggests a pause ahead of a hike in December.

• The release notes that all five sub-indices contributed to pulling the main index lower, and that purchasing prices are still rising somewhat (albeit lower than the long run average).
• The production index fell to 45.7 (vs 51.3 prior), while employment was slightly lower at 52.0 (vs 53.5 prior).
• The headline deterioration is somewhat consistent with the Q3 Business Tendency Survey, which was also contractionary at -2.2 points. However, the Tendency Survey masked large sectoral differences between capital goods (which performed strongly) and consumer/intermediate goods meaning a similar story may be at play with the PMI.
• NOK did not react meaningfully to the release, and continues to sit broadly weaker against the G10 this morning amid a soft risk environment and low volumes.