August data shows Euro area business sentiment stabilizing as manufacturing growth offsets stagnant services activity.
The Eurozone composite Purchasing Managers’ Index inched up to 52.1 in August from 52.0 in July, signaling a slight improvement in business sentiment. The modest gain was driven by strengthening manufacturing activity, while services growth remained flat for the month.
The reading aligns with expectations for moderate economic stabilization, though it remains below levels seen in early 2023. Prior months had shown mixed signals, with manufacturing contracting before August’s rebound and services activity cooling from stronger prints earlier in the year.
Markets are monitoring the divergence between sectors as policymakers assess growth prospects amid persistent inflation pressures.