Eurozone business activity accelerated in August, with the S&P Global Flash Eurozone Composite PMI Output Index rising to 52.1 from 52.0 in July, marking the strongest expansion in nine months. The pickup was driven by a rebound in manufacturing, where the Flash Eurozone Manufacturing Output Index climbed to 53.4 from 52.9, reaching its highest level in 54 months.
The headline Manufacturing PMI improved to 52.8 from 51.9, the highest since May 2022, while the Services PMI remained unchanged at 51.7. Germany’s manufacturing production expanded at the fastest pace since January 2022, contributing to the regional upturn. New orders rose for the second consecutive month, with new export orders expanding for the first time in four-and-a-half years, according to S&P Global Market Intelligence data.
Employment increased in August, ending a 38-month streak of job cuts in manufacturing. Input cost inflation eased to its weakest level since February, while output price inflation slowed to its lowest since March. Business confidence, however, fell to a three-month low.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, noted that the data points to a 0.3% quarterly GDP expansion in the eurozone, supported by precautionary stock building amid Middle East supply chain disruptions, rising demand for AI-related technology goods, and increased equipment orders tied to defense spending.
