Eurozone manufacturing PMI rises to 52.7 in August, Germany shows best growth in four years

• The final reading for the Eurozone manufacturing PMI in August was 52.7, slightly below the preliminary estimate of 52.8.
• This followed a previous reading of 51.9.

The revised figures confirmed a solid performance for the euro area's industrial sector in August, with factory output and new orders growing at their fastest pace since the beginning of 2022.

Inflationary pressures continued to ease as well, which was encouraging. Still, the rate of increase for both input costs and output prices remained above the levels seen just before the US-Iran conflict.

Germany contributed the most positive swing to the overall report, achieving its best month of manufacturing growth in over four years. This provided some relief after years of ongoing struggles for the sector.

Moreover, business confidence strengthened again in August, marking the fourth consecutive monthly rise in growth expectations for the next twelve months. The overall optimism level also stood above its long-term average.

S&P Global commented:

"The August PMI report provided the clearest signs yet that the eurozone's industrial economy has so far shaken off both the oil price shock and supply-related disruptions caused by the Middle East war. Stronger order book growth, in part owing to a recovery in export demand, should give this expansion legs."

"Breaking the PMI data down by the three main industrial groupings revealed the intermediate goods sub-sector as the main contributor of manufacturing growth. This includes critical industries such as chemicals and metals, as well as electrical equipment and electronic components, suggesting the euro area can also be a beneficiary from the tech supercycle, even if it's arriving late to the party."

"A further softening of producer price increases, even in the midst of sustained oil market volatility, helps to alleviate broader inflation worries. That said, the pace of disinflation is starting to level off and the PMI's price metrics remain well above their pre-war levels, which may just embolden a cautious stance by eurozone monetary policymakers."