Eurozone Business Output Cools in August, Still Hovers Around 15-Year High

Source: IHS Markit

Eurozone business activity growth cooled in August, but remained at historic highs after the 15-year high performance recorded in July.

• The headline IHS Markit Eurozone Composite PMI stood at 59.5 in August. This matched the June figure to post the second-fastest expansion since 2006, following July’s 60.2.
• The Services PMI Activity Index eased to 59.7, while the Manufacturing PMI fell to 59.2 or the lowest since the start of the COVID-19 pandemic.
• This is the first time since the pandemic hit that the service sector overtook manufacturing. 
• The slowdown in production growth was attributed to supply chain constraints, causing the manufacturing output to moderate for the second straight month.
• New orders hovered around 20-year highs, while future sentiment remained at the highest since data collection for the indicator in 2012.
• Input costs climbed due to supply delays and surging demand. These were then passed on to customers.