Euro zone business activities accelerate in August as new orders have grown, PMI shows
The Euro Zone business sees a new order increase in August for the first time since May 2024, helping overall activities develop at the fastest speed in 15 months despite continuous export weaknesses, a survey said on Thursday.
The HCOB Flash Eurozone Composite Purchasing Manager Index, compiled by S&P Global, rose to 51.1 in August from 50.9 in July, marking the third monthly increase in succession and the highest reading since May 2024
PMI reading above 50.0 shows the growth of the temporary activity below refers to the contraction.
“A small increase in the combined PMI … shows that the Euro zone economy continues to face a global storm quite well,” said Bert Colijn Di Ing.
“Increasing new orders and increasing recruitment adds to the overview of the acceleration of growth, but the speed muted seems to be likely to be given a significant risk of decline in views.”
The manufacturing sector shows an important increase with the headline PMI rises to 50.5 from 49.8 in July, moving to the expansion area for the first time in more than three years. Manufacturing output grows at the fastest level in almost three and a half years, with subindex rising to 52.3 from 50.6.
Service activities continue to grow but at the reduced speed, with the dominant PMI sector slipped to 50.7 out of 51.0 in July.
Germany, the largest economy in Europe, registered the fastest growth since March, driven by solid manufacturing expansion despite the planned service performance. The decline in France subsided to the marginal decline, which was the smallest in a year, while growth in the remaining euro zone continued but softened a little.
PMI Germany rose to 50.9, faster than estimates in Reuters polls, while in French activities almost grew with its PMI entering 49.7.
However, the consumer confidence of the Euro Zone is expected to have fallen when the data was released on Thursday by the European Commission.
In the UK, outside the European Union, business experienced the strongest month in a year thanks to rebounds in the dominant service sector.
Price pressure increases
Companies in the Euro zone continue to employ for the sixth month in a row, with a faster job creation rate to the fastest since June 2024. The advantages of work are concentrated on services, while producers continue to release work.
Inflation pressure increased in August, with input costs rising at the sharpest level in five months. The inflation of the service sector costs has been accelerated to the highest since March, while the output prices in all blocks have increased at the fastest speed in four months.
“The European Central Bank may be slightly grimaced at increasing cost pressure in the service sector. Besides, it is banking for slower wage growth to help reduce inflation in this important economic section,” Cyrus de la Rubia said at Hamburg Commercial Bank.
“That said, there was a little help in the fact that inflation in the selling price of the service sector remains more or less stable.”
ECB policy makers are seen waiting until December if they choose to cut the tariff once again, Reuters polls are found, but there is no longer a majority consensus for where the deposit level will be in the end of the year.
Global central bank leaders meet at the Jackson Hole Federal Reserve US symposium for the next few days and investors will examine every speech for instructions on policies.
Source: Reuters
