Eurozone’s manufacturing PMI drops to three-month low in August

Eurozone’s manufacturing sector’s growth lost momentum in August. The final Markit Eurozone Manufacturing PMI came in at 51.7 in the month, a three-month low. It was a fall from June’s year-to-date high and slightly lower than the flash estimate of 51.8. The PMI has now signalled growth for 38 straight months.

Manufacturing production growth in the currency bloc decelerated, whereas new order inflows rose to the weakest extent in one-and-a-half years. Firms have registered slower increase in new business from export and domestic sources, said Markit Economics. Headline PMI data has hinted that out of eight countries covered by the survey, six member nations recorded growth in August. However, growth imbalances remained.

Germany and the Netherlands recorded strong growths, while in Spain, Austria and Greece, it was comparatively weak. Italy and France both saw contractions. This showed an extension of the present manufacturing downturn in France to six months. Stability in production volumes was countered by the sharpest decline in new orders for four months.

In the meantime, Italy registered the first contraction since January 2015 as growth in output decelerated to near-stagnation and new order inflows dropped for the first time in 19 months. New export orders in the currency bloc’s manufacturing sector grew at the slowest rate since May. Germany and the Netherlands were the only member nations to record a significant rise. Growth was also seen in Spain, Italy and Greece, whereas Austria, Ireland and France saw contraction in new export orders.

Meanwhile, job creation in the euro area manufacturing sector declined to the weakest since March. But, the outlook for staffing levels continued to be slightly positive, as backlogs of work increased at the most rapid rate for two-and-a-half years. France was the only nation that did not register a rise in employment, with its pace of decline accelerating to the most rapid rate since May. However, amongst the nations reporting a rise, only Ireland witnessed an improvement in pace of job creation.