Analysis of Eurozone PMI Data for August 2024
The Eurozone economy showed signs of improvement in August, with the PMI survey data indicating a faster pace of output growth and suggesting that a downturn has been avoided. The provisional estimate of the August PMI is one of improved growth, driven largely by an upturn in the French service sector coinciding with a temporary boost from the Paris Olympics.
However, the outlook remains uncertain as the manufacturing sector continues to struggle, with new orders falling at the fastest rate in eight months. Employment data also signaled job losses, with a decline in employment for the first time in eight months.
Despite some positive indicators, such as prices rising at a modest rate and input cost growth moderating, the overall economic outlook for the Eurozone remains cautious. Forecasters expect the European Central Bank to cut interest rates twice more this year, with the next cut anticipated at September’s meeting.
The August flash PMI data will be crucial in confirming the outlook for the Eurozone economy and will play a significant role in shaping future monetary policy decisions.
