Euro Area: Services PMI rises in August
The HCOB Eurozone Services Purchasing Managers’ Index (PMI) improved to 52.9 in August from 51.9 in July. As a result, the index moved further above the 50.0 no-change threshold, and signaled a faster improvement in services-sector business activity compared to the previous month.
August’s improvement was spearheaded by a quicker rise in new business, driven by stronger domestic demand; in contrast, new exports orders shrank at the steepest rate since February. Meanwhile, firms managed to go through their backlogs at a faster clip, aided by rising employment levels.
In terms of prices, input cost inflation cooled, while output charges rose at the fastest pace since May.
Dr. Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said:
“The Olympic Games in Paris brought plenty of victories, and the French service sector was certainly among the winners. The latter helped drive accelerated growth in the eurozone’s service sector for August. But the big question is whether this boost is sustainable. The positive vibes from the Games and the ongoing Paralympics might carry through into September in part, but we expect the slowdown in growth, which started in May, to likely resume in the coming months.”