Eurozone business activity shrank for a second straight month in August as the cost-of-living crisis forced consumers to cut spending, while supply constraints also hit manufacturers.
Specifically, S&P Global’s composite PMI fell to 49.2 points in August from 49.9 points in July, slightly higher than average estimates for a drop to 49 points.
The latest PMI data for the eurozone point to an economy in recession in the third quarter of the year, commented S&P Global chief financial officer Andrew Harker.
Suggesting that there will be no immediate recovery, demand also fell for a second month. The new business index came in at 47.7, slightly higher than July’s 47.6.
The services PMI fell to 50.2 from 51.2, marginally above the 50 mark and below estimates of 50.5.
Although the services sector increased its charges at a slower pace this month, the producer price index remained well above the long-term average at 59.9 from 62.1 in July.
“Cost-of-living pressures mean the recovery in the services sector following the lifting of pandemic restrictions has waned, while manufacturing remained mired in contraction in August,” S&P Global’s Harker said.
Source: Capital
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