London (Reuters) – Companies in the private sector in the euro zone have experienced in August an increase in new orders for the first time since May 2024, supporting an expansion of activity despite continuous export weakness, according to a global S&P survey with purchasing directors published on Thursday.

The HCOB Composite PMI index, which brings together manufacturing and services services, increased to 51.1 in August after 50.9 in July, the third consecutive month of improvement and the highest level affected since May 2024.

The economists interviewed by Reuters anticipated a composite PMI index of 50.7.

The threshold of 50 separates a contraction of activity growth.

“The situation is improving. Economic activity has resumed both in the manufacturing sector and in services,” observes Cyrus de la Rubia, economist at the Commercial Bank Hamburg.

The PMI index of the manufacturing sector increased at 50.5 in August, after 49.8 in July, reconnecting with growth for the first time in more than three years.

The PMI index for services reached 50.7 in August after 51 in July.

The inflationary pressures, however, intensified in August, the costs of inputs that increased the most marked in five months.

The cost increase in the service sector has reached its highest level since March, while production prices throughout the block have increased at their fastest pace in four months.

“The European Central Bank could be somewhat embarrassed by increasing pressure on costs in the service sector”, points Cyrus de la Rubia. “After all, it relies on a slowdown in wage growth to help lower inflation in this crucial sector of the economy.”

(Written by Jonathan Cable, Blandine Hénault, edited by Augustin Turpin)

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