Eurozone business activity grows again in August

Eurozone business activity grew for a second consecutive month in August, with S&P Global’s purchasing managers’ index rising to 52.1 from 52 in July.

A PMI reading above 50 signals growth, while a reading below 50 signals contraction. The August figure was supported by manufacturing growth despite supply chain delays linked to the war in the Middle East.

S&P Global chief business economist Chris Williamson said the reading “sets the eurozone up for a robust increase in third-quarter GDP of around 0.3 percent.” He said manufacturing was the “star performer,” with its strongest growth in four and a half years, while services also supported activity.

Business activity in the 21-country single currency area had returned to growth in July for the first time in four months. Williamson said the US war with Iran still clouded the outlook because supply chain delays remained widespread.

He also pointed to rising demand for AI-related technology goods and equipment linked to higher defence spending, saying those trends were helping Germany in particular. Tourism, especially outside France and Germany, was also supporting economic output.