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Eurozone PMI holds near 52 as price pressures strengthen ECB case
PMI data showed export orders returning to growth after four and a half years, while services price pressures rose to three month highs.
Eurozone private sector activity held firm in August, with the PMI Composite unchanged at 52.0, matching July’s eight month high and staying near the long run average of 52.3, S&P Global data showed.
New orders rose at the same pace as in July, employment increased for the first time this year, and export orders returned to growth for the first time in four and a half years, driven by manufacturing. Services activity softened only marginally, with PMI Services easing from 51.7 to 51.6, still pointing to a second straight month of expansion.
Hiring strengthened further, with job creation accelerating to an eight month high, though business expectations moderated. At the same time, price pressures picked up in services, as both input cost and output charge inflation moved to three month highs, indicating the disinflation trend is stalling.
Action Forex, citing S&P Global’s Joe Hayes, said the August readings put the eurozone on track for a solid third quarter of growth, while highlighting a slowdown in disinflation, a combination Hayes said may make ECB policy tightening more justified at next week’s meeting.