Eurozone: August manufacturing Pmi steady at 45.8 points

The Pmi manufacturing index in the Eurozone is at a standstill: in August it stood at 45.8 points, the same value as in July. This was reported by S&P Global, stating that the leading index has been below the no-change threshold of 50 since July 2022. It was the two largest economies, Germany and France, that held back August's overall results the most, with manufacturing deteriorating in both countries. The only ones that reported growth were Greece, Spain and Ireland, although rates of improvement slowed in the first two.

"Things are going downhill, and fast. The manufacturing sector has been stuck in a dead end, with business conditions deteriorating at the same solid pace for three consecutive months, bringing the recession to 26 months or more," said Cyrus de la Rubia, of Hamburg Commercial Bank. "New orders, both domestic and international, are slowing further, thwarting any hope of a short-term recovery."

The index for new orders dropped to 43.3 from 44.1, the lowest since December. Demand from abroad also fell at the fastest pace this year.

The drop was due to the fact that manufacturers raised prices for the first time in 16 months, driven by factory hikes in France, the Netherlands, Greece and Italy. "This could put the ECB in trouble as it grapples with persistent inflation in services and falling prices in the manufacturing sector to maintain disinflation," de la Rubia said.

However, preliminary official data on Friday showed that overall inflation in the currency bloc fell to a three-year low of 2.2 per cent in August, reinforcing speculation of further policy easing by the European Central Bank.