Eurozone PMI manufacturing dropped to 54.6 in August, downf rom 55.1 and missed expectation of 55.1. PMI services rose to 54.4, up from 54.2 and matched expectations. PMI composite rose to 54.4, up merely 0.1 from 54.3.
Comment Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:
“The survey data indicate that the eurozone economy looks to have continued to grow at a steady rate in August, raising hopes that the third quarter could see GDP growth match the 0.4% expansion seen in the second quarter. In fact, the survey evidence suggests that the official data so far this year could yet be revised slightly higher.
“Jobs growth also remains encouragingly robust, which should help further stimulate consumer spending and help offset signs of continuing weakness in exports.
“With the indicators of current activity, employment and price gauges remaining elevated, the August survey sends a hawkish signal to policymakers. But the forward-looking indicators suggest the business mood could cool as summer passes.
“Warning lights are flashing. Analysis of past data indicates that demand needs to pick up to sustain current output and employment growth in coming months. Yet the risks seem tilted to the downside.
“Escalating political worries, rising prices and a recent slowdown in order book growth have all contributed to the gloomiest outlook for almost two years, according to companies’ expectations of their future output. In manufacturing, optimism is down to its lowest for almost three years, as a nearstalling of exports corroborated escalating trade war worries.
“With manufacturing looking the most susceptible to a trade-led slowdown in coming months, hopes are pinned on a robust service sector helping to drive economic growth as we move into the autumn, yet even here optimism is down to its lowest for nearly two years.”
