Euro Area: Business activity slumps further in August

Euro Area PMI August 2023

Euro Area: Business activity slumps further in August

The HCOB Flash Eurozone Composite Purchasing Managers’ Index (PMI) fell to 47.0 in August from 48.6 in July, marking the weakest reading in 33 months. Excluding pandemic months, the reading was the worst since April 2013. Consequently, the index fell further below the 50 no-change threshold, signaling a sharper deterioration in business conditions compared to the prior month.

Output and demand fell among both manufacturing and services firms, while employment across the two sectors came close to stagnating. Lastly, business confidence remained downbeat. On the price front, in the manufacturing sector, input costs fell at a softer pace. Meanwhile, in the services sector, input prices rose more sharply. Consequently, output prices fell at a slower clip in the manufacturing sector and increased at a softer yet still-elevated rate in the services sector.

Commenting on the release, Bert Colijn, senior economist at ING, stated:

“Another weak PMI for the eurozone confirms a sluggish economy with recession as a downside risk. Inflation pressures for services remain stubborn as wage pressures continue to be a concern. The latter adds to our expectations that the ECB’s hiking cycle is not over yet.”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest