Financial News: Eurozone Manufacturing Growth At 38-Month High

Eurozone Manufacturing Growth At 38-Month High

(RTTNews) - The euro area manufacturing activity grew at the fastest pace in more than three years in August driven by a sharp rise in output and the renewed uptick in domestic demand, data published by S&P Global showed on Monday.

The HCOB final manufacturing Purchasing Managers' Index improved to 50.7 in August from 49.8 in July. This was the first expansion in the currency bloc since June 2022. The flash score was 50.5.

Driven by the rise in demand, production expanded the most since March 2022. At the same time, total new orders increased for the first time in nearly three-and-a-half years.

Despite increased new order intakes, operating capacities were not placed under greater strain. Backlogs of work continued to decrease in August.

Employment decreased at the slowest pace in the current 27-month sequence of contraction.

Further, the survey showed that both pre- and post-production inventories were reduced and at the quickest extents since March. Purchasing activity also decreased more rapidly.

Manufacturers registered an increase in operating expenses for the first time in five months. Prices charged were discounted fractionally.

Finally, manufacturers looked to the next 12 months with optimism, but there was little change in sentiment when compared with July.

"The recovery is real but remains fragile," Hamburg Commercial Bank Chief Economist Cyrus de la Rubia said.

Given U.S. tariff policies and geopolitical tensions, it is hardly surprising that inventory levels continue to fall and order backlogs accelerated slightly as uncertainties remain high, de la Rubia said. "We see the fact that production is being ramped up and more orders are being registered in this environment as a sign of resilience," the economist added.

The survey showed that operating conditions in Germany broadly stabilized in August. Spain reported strong upturn and France and Italy posted renewed expansions.

Germany's manufacturing sector moved closer to stagnation with production registering the fastest rise in nearly three-and-a-half years in August. The factory PMI advanced to a 38-month high of 49.8 from 49.1 in the previous month but it was slightly below the flash estimate of 49.9.

France's manufacturing activity grew for the first time since January 2023. The HCOB final factory PMI posted 50.4 in August, up from 48.2 in July. The flash estimate for August was 49.9.

Spain's manufacturing sector logged its strongest growth since last October. The HCOB factory PMI moved up to 54.3 in August from 51.9 in July. Output, new orders and employment all rose to stronger degrees compared to July.

Italy's manufacturing sector logged its first expansion in nearly one-and-a-half years in August. The HCOB factory PMI hit 50.4 in August, up from 49.8 in July.

For comments and feedback: contact editorial@rttnews.com

Copyright(c) 2025 RTTNews.com. All Rights Reserved

Market News provided by RTTNews