Eurozone August output falls at fastest rate in three years

Output in the eurozone during August fell at its fastest rate in three years in August, with services survey data revised downwards from initial estimates and price inflation making a worrying return.

The composite PMI in the eurozone slipped for the fourth straight month to a 33-month low of 46.7 in August, from 48.6 in July, below consensus estimates and the flash reading of 47.0, according to S&P Global.

The services PMI slid below the 50 “no-change” level for the first time in seven months in August, and the fall in services activity was bigger than previous estimates, dropping to 47.9, from the flash print of 48.3 and the 50.9 recorded in July.

"The overall retreat in activity was the fastest since November 2020, and broad-based across the manufacturing and services sectors as the latter contracted for the first time in 2023 so far. New orders also dropped the most since late-2020, leading to companies completing outstanding work at the fastest rate in over three years," S&P said.

"This resulted in one of the softest 12-month outlook in 2023 so far and a near-stalling of jobs growth, with private sector employment rising at the slowest rate in the current 31-month sequence of increases."

"The latest prices data were also cause for concern, as input price inflation accelerated on the month for the first time since September 2022. The average increase in prices charged for goods and services was the slowest in two-and-a-half years, but remained stronger than the long-run trend."

Reporting by Frank Prenesti for Sharecast.com