Eurozone business activity strengthened in August, reaching a nine-month high as manufacturing output expanded at its fastest pace in 54 months, according to preliminary data from S&P Global.
The composite output Purchasing Managers' Index (PMI) increased to 52.1 from 52.0 in July, signaling continued expansion in private sector activity. Manufacturing output rose to 53.4 from 52.9, while the headline manufacturing PMI climbed to 52.8 from 51.9, marking the highest level since May 2022.
Services business activity remained broadly stable at 51.7, unchanged from July, indicating modest but sustained growth in the sector. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, noted that the data supports a projected third-quarter GDP expansion of approximately 0.3% for the eurozone.
Manufacturing growth was attributed to several factors, including precautionary stockpiling amid supply chain disruptions in the Middle East, rising demand for artificial intelligence-related technology products, and increased investment in equipment driven by defense spending. New orders reached a 40-month high, with new export orders expanding for the first time in 4.5 years.
Employment trends also improved, with manufacturing job growth recorded for the first time in 2026 after 38 consecutive months of cuts. Input cost inflation eased to its weakest level since February, while final price inflation slowed for a third straight month to its lowest level since March. Business confidence, however, dipped to a three-month low.
The data suggests a mixed but improving economic outlook for the eurozone, with manufacturing leading the recovery while services maintain steady, albeit subdued, growth.
