Business activity in the Eurozone accelerated in August to reach a one-year high, according to the latest composite PMI value, announced today, reaching 51.0 points.
The HCOB Composite PMI (Purchasing Managers’ Index) for total activity in the Eurozone, compiled by S&P Global and published today, indicated that the weighted average of the various indices hit 51.0 points in August, up from 50.9 points in July, marking the highest level in a year.
The report from S&P Global notes that growth “was limited by the services sector, which showed a marginal and slower recovery.”
The industry, on the other hand, recorded its largest production increase “in nearly three and a half years.”
Business confidence showed little change from July and remained below its long-term average, while material costs rose, prompting European companies to increase prices charged to their clients.
Quoted in the analysis, HCOB Chief Economist Cyrus de la Rubia compared the slow pace of progress to riding a bicycle.
“Riding a bicycle very slowly can cause you to fall. That is the risk the Eurozone faces. Although the economy has been growing since the beginning of the year, the pace is painfully slow,” he stated.
De la Rubia also pointed to uncertainty surrounding the trade agreement between the EU and the United States, as well as issues in the European automotive sector.
“The positive side is that defense spending across Europe and Germany’s infrastructure program offer hope that the economy can continue to move forward and avoid a downturn,” he added.
