Eurozone business activity held steady in August, with the S&P Global Eurozone Composite PMI Output Index remaining at 52.0, unchanged from July and matching the highest reading in eight months. The index stayed above the 50.0 threshold that separates growth from contraction and remained close to its long-term average of 52.3.
Services sector activity, however, softened slightly. The S&P Global Services PMI Business Activity Index declined to 51.6 from 51.7 in July, marking a two-month low. Despite the dip, the reading still indicated expansion.
Regional performance varied. Southern eurozone economies led growth, with Spain and Italy posting strong increases in economic activity. Germany recorded its fastest expansion since March, while France extended its contraction streak to eight consecutive months.
New order inflows grew at the same pace as July, matching the joint-strongest improvement in demand since November 2025. The eurozone private sector also saw its first increase in new export orders in 4.5 years, driven by the manufacturing sector.
Employment rose for the first time in 2026, with workforce numbers increasing at a pace aligned with the survey average. Backlogs of work were cleared at a slower rate than in previous months, indicating easing pressure on capacity.
Input cost inflation edged lower in August, though both input and output price increases remained elevated relative to pre-Middle East war levels. The survey data were collected between August 10 and August 25, 2026.
Joe Hayes, Senior Principal Economist at S&P Global Market Intelligence, said the August PMI data suggested the euro area was on track for solid third-quarter growth. "Momentum in the industrial economy has picked up nicely and the service sector has shaken off the initial weakness seen after energy prices surged at the start of the Middle East war," Hayes said.
