Euro area August final PMIs remain insensitive to global economic worries

Euro area final composite PMIs were slightly revised up from the flash estimate to 54.3 (+0.2 point), edging up in August to a 51-month high. The minor upward revision was driven equally by the services and manufacturing sectors. Despite greater global economic uncertainties, both manufacturing and services confidence showed some resilience in August: manufacturing output hit a 15 month high at 53.9, while services rebounded to 54.4, the second-highest print since May 11. 

"Overall PMI suggest that the growth momentum will be maintained in Q3, with our Q3 PMI-based GDP indicator standing at +0.5% q/q - a touch above our 0.4% q/q Q3 GDP projections", states Barclays.

Country wise, a solid upward revision in German PMIs offset the disappointing final reading in France, while Spain and Italy both surprised to the upside. 

In Germany, significant upward revision in the services sector pushed the composite index up to 55.0. Services details revealed buoyant new business and business expectations, signalling that the positive momentum should be sustained at the end of Q3. Overall, the Q3 PMI-based GDP indicator was revised up from the flash to +0.6% q/q (+0.1pp), slightly higher than their 0.4% q/q forecast, says Barclays. 

French PMIs were the dark spot of the release, with composite revised down from the flash to 50.2 (-1.1 points), a seven-month low. Both sectors experienced downward revisions from the preliminary release, and over the month, confidence declined by around 1.3 points for both, mainly on weaker new orders. Such a decline contrasts with the more positive picture painted by the INSEE survey, notes Barclays.