Services slow growth in the eurozone in August

The eurozone economy continued to grow at a snail's pace in August. According to the HCOB Composite Purchasing Managers' Index (PMI), compiled by S&P Global, the index rose slightly from 50.9 in July to 51.0 points – a 12-month high, but still a sign of only weak growth. Values above 50 signal expansion.

The increase is mainly due to a slight recovery in industrial production. In contrast, growth slowed in the service sector, which dominates the eurozone economy. The corresponding PMI fell from 51.0 to 50.5 points.

For the first time since May 2024, new orders rose slightly again, driven by the domestic economy. Export orders, on the other hand, fell at their fastest rate since March.

Among the major economies, Spain remained the frontrunner despite a slight slowdown, followed by Italy. Growth slowed in Germany, while France remains in contraction territory at 49.8 points, despite rising to a yearly high.

Employment grew at its fastest pace in 14 months, particularly in the service sector. At the same time, costs for companies rose again, which could complicate the ECB's inflation outlook.

(reuters, red)