The slump in private sector activity in the euro area worsened in August, with weak manufacturing now weighing on service firms, amid persistently weaker demand, according to the flash PMI released on Wednesday by S&P Global.
The index, calculated on the basis of business surveys, fell to 47 in August from 48.6 in July (revised figure), its lowest level in almost three years. A number above 50 indicates growth in activity, while a number below indicates a contraction.
In Germany, activity contracted in August at the strongest rate in more than three years. The “flash” composite PMI fell to 44.7 from 48.5 in July, the lowest level since May 2020 and well below the consensus of 48.3.
France does better than Germany
“Any hope that the service sector could save the German economy has been dashed,” observes Cyrus de la Rubia, an economist at the Commercial Bank of Hamburg. “In contrast, the service sector is about to join the manufacturing downturn, which appears to have started in the second quarter.”
Activity in the service sector contracted for the first time in eight months. Its “flash” PMI index stood at 47.3 from 52.3 in July, a nine-month low.
The “flash” PMI for the manufacturing sector rose to 39.1 in August from 38.8 in July.
In France, the composite index, which includes the sectors maker and services, remained at 46.6 as in July, a low since November 2020.
Source: BFM TV
