Economic Buzz: Eurozone composite PMI improved to 51.1 in August
New orders increased in the Eurozone during August thereby ending a period of decline stretching back to June 2024. The renewed expansion in new business helped lead to a further pick-up in business activity, which rose to the greatest extent in 15 months.
Companies also increased their staffing levels, the sixth month running in which this has been the case. Meanwhile, inflationary pressures strengthened, with both input costs and output prices rising at sharper rates in August.
The stronger expansion in output midway through the third quarter of the year was driven by the manufacturing sector, where production increased at a solid pace that was the fastest in almost three-and-a-half years. Meanwhile, services business activity rose for the third month running, albeit only slightly and to a smaller degree than was the case in July.
New orders returned to growth in August, thereby ending a 14-month sequence of decline. Growth in total new business was recorded in spite of a further reduction in new export orders.
Eurozone companies continued to take on additional staff in August, extending the current sequence of job creation to six months. As such, backlogs of work continued to fall in August, extending the period of depletion which began in April 2023. The latest fall was also slightly sharper than that seen in July.
Input prices rose sharply, and at the steepest pace in five months. The pass through of higher input costs to customers meant that output prices increased again in August.
Manufacturers in the euro area continued to scale back their purchasing activity during August. Business confidence waned for the second consecutive month in August.
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