Financial News: Eurozone Private Sector Expands Most In 9 Months

Eurozone Private Sector Expands Most In 9 Months

(RTTNews) - The euro area private sector expanded the most in nine months in August driven by strong growth in manufacturing, flash survey data from S&P Global revealed Friday.

The composite output index climbed unexpectedly to 52.1 in August from 52.0 in July. The reading was seen at 51.7.

Manufacturing production increased at the fastest pace in four-and-a-half years. Meanwhile, the moderate expansion in services activity was unchanged from the July level.

"A sustained solid rise in business activity in August sets the eurozone up for a robust increase in third quarter GDP of around 0.3%," S&P Global Market Intelligence Chief Business Economist Chris Williamson said.

"The manufacturing sector is again the star performer, enjoying its strongest growth for four-and-a-half years, with the services economy providing a supporting role, notching up another month of decent growth after the malaise seen in the second quarter," Williamson added.

The flash manufacturing Purchasing Managers' Index rose to 52.8 from 51.9 in the prior month. The score was expected to drop to 51.8. At the same time, the services PMI remained unchanged at 51.7 and came in slightly above forecast of 51.5.

Overall, business activity in Germany rose modestly in August, while France posted a further decline. The rest of the euro area as a whole registered the fastest expansion since April 2022, S&P said.

Germany's private sector expanded in August as continued upturn in manufacturing production offset subdued performance across the services economy. At 51.0, the composite output index was down from 51.3 in July. The score was expected to remain stable at 51.3.

The services PMI dropped unexpectedly to a three-month low of 48.5 from 49.8 in the prior month. Economists had forecast the index to improve to 50.1.

On the other hand, the factory PMI hit a 51-month high of 54.1, up from 52.2 in the previous month and also well above forecast of 52.1.

France's private sector contracted further in August due to the downturn in services activity. The flash composite output index fell to 48.8 from 49.4 in July. The reading was below forecast of 49.5.

The downturn in overall activity was entirely driven by services companies as manufacturing output grew for the first time since April. The services PMI registered 48.4, down from 49.6 in the prior month. Meanwhile, the factory PMI improved to 51.5 in August from 49.8 in July.

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