Eurozone manufacturing strengthened further in August, with PMI Manufacturing rising from 51.9 to 52.7, its highest in 51 months. PMI Manufacturing Output increased from 52.9 to 53.3, a 54-month high, while new factory orders rose at their fastest pace since early 2022. Export demand also improved, with new export business expanding for only the second time in four-and-a-half years. Germany provided a major boost, recording its strongest manufacturing growth in more than four years, while France also contributed to the broader improvement.
The underlying survey pointed to a broader recovery in activity. Output growth accelerated for a third straight month, led by intermediate goods, while manufacturers resumed purchasing after cutbacks in June and July. Employment was broadly unchanged, marking a notable stabilization after more than three years of continuous declines, and business confidence strengthened for a fourth consecutive month to above its long-term average. Italy slipped back into contraction and Spain remained below 50, however, showing recovery was still uneven across countries.
Price pressures continued to ease despite persistent supply disruption. Input cost inflation slowed to its weakest rate in six months, while output price inflation also softened, although both remained above levels seen before Middle East war. Supplier delivery times lengthened sharply again, underscoring ongoing logistics strain. Overall, August data point to firmer manufacturing momentum, stronger demand and improving confidence, with inflation pressures easing but not yet fully normalized.
Data Summary
| Indicator | August | July | Trend |
|---|---|---|---|
| PMI Manufacturing | 52.7 | 51.9 | 51-month high |
| PMI Manufacturing Output | 53.3 | 52.9 | 54-month high |
Components
| Component | Trend |
|---|---|
| New Orders | Fastest increase since early 2022 |
| New Export Orders | Expanded for only second time in four-and-a-half years |
| Production | Growth accelerated for third straight month |
| Purchasing Activity | Returned to growth after June-July declines |
| Employment | Broadly unchanged after more than three years of decline |
| Backlogs of Work | Unchanged |
| Business Confidence | Rose for fourth straight month; above long-term average |
| Input Cost Inflation | Slowed to six-month low |
| Output Price Inflation | Eased further |
| Suppliers’ Delivery Times | Lengthened sharply, slightly more than in July |
| Stocks of Purchases | Fell at a faster pace |
Key Takeaways
- Eurozone PMI Manufacturing rose from 51.9 to 52.7, reaching its highest level in 51 months.
- PMI Manufacturing Output increased from 52.9 to 53.3, marking strongest reading in four-and-a-half years.
- New orders grew at fastest pace since early 2022, while export business returned to growth for only second time in four-and-a-half years.
- Germany recorded its strongest manufacturing growth in more than four years, while France also improved. Italy returned to contraction and Spain remained below 50.
- Employment stabilized after more than three years of continuous decline, while business confidence strengthened again.
- Input and output price inflation both eased, but remained above pre-Middle East-war levels.
- Supply disruption persisted, with delivery times lengthening sharply again.
