(Reuters) – The activity of the private sector in the euro zone increased at a low rate in August, the rebound in the manufacturing sector compensating for the very low increase in the service sector while new orders increased for the first time since May 2024, showed a survey published on Wednesday.
The composite index of the final purchase directors (PMI) of the euro zone, compiled by S&P Global, increased at 51.0 in August, against 50.9 in July, marking a higher 12 months but a level slightly lower than expectations (51.1).
The index, however, reflects modest growth in the block, the 50.0 threshold separating growth and contraction of the activity.
New orders in the entire economy have increased for the first time since May of last year, but only slightly, domestic demand compensating for the drop in export orders that have decreased the fastest since March.
Among the main economies of the euro zone, Spain and Italy are pulling out of the game while activity growth has slowed down in Germany and France remained in contraction territory, despite a higher in 12 months at 49.8.
“Admittedly, the economy has grown since the beginning of the year, but the pace is painfully slow,” said Cyrus de la Rubia, an economist at Hamburg Commercial Bank, stressing “political tensions in France and Spain, the uncertainty surrounding the trade agreement between the European Union and the United States and the persistent problems in the key sector of the automobile”.
The predominant service sector has seen its growth slowly slow down, its PMI index falling to 50.5 in August, against 51.0 in July, its highest level for four months.
The manufacturing industry has registered the strongest growth in its activity for almost three and a half months.
The overall employment growth has accelerated to reach its highest level for 14 months, service companies increasing their workforce while factories always reduce their workforce.
Pruits on prices also intensified in August, input costs that increase the fastest since March and companies increasing their prices at the highest rate in four months.
Business confidence has hardly changed compared to July and has remained lower than its long -term average, proof of caution in the private sector.
(Written by Indradip Ghosh; Bertrand de Meyer, edited by Blandine Hénault)
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