Eurozone business activity expanded at a slower pace in August, with the services sector posting its weakest reading in two months as input costs and selling prices climbed to three-month highs.
The S&P Global Purchasing Managers’ Index for services fell to 51.6 from 51.7 in July, undershooting the preliminary estimate that had suggested stability. The composite measure, which combines services and manufacturing, held at 52.0, just below its long-term average of 52.3. A reading above 50 indicates growth.
Services employment rose at the fastest pace in eight months, extending a trend observed since June. Private-sector export orders increased for the first time in 4.5 years, driven by stronger demand for manufactured goods. Input costs and selling prices in services both accelerated to three-month highs in August.
Joe Hayes, Senior Economist at S&P Global Market Intelligence, noted that August’s PMI data point to solid third-quarter growth for the eurozone. "The momentum in the industrial economy has accelerated satisfactorily, and the services sector has overcome the initial weakness observed after the surge in energy prices at the start of the Middle East conflict," Hayes said.
The data follows a period of volatility in energy markets tied to geopolitical tensions in the Middle East, which had weighed on business sentiment earlier in the year. The latest figures suggest a stabilization in activity, though risks remain tied to persistent cost pressures and external demand conditions.
