Eurozone services sector growth falters in August as travel restrictions bite

Growth rates in euro area manufacturing and services unexpectedly parted ways last month as the reimposition of travel restrictions weighed on the latter, the results of two key surveys revealed.

IHS Markit's Eurozone factory sector Purchasing Managers Index was little changed, dipping from July's level of 51.8 to 51.7.

But the services sector PMI dropped from 54.7 to 50.1 alongside.

In manufacturing, a gauge of output levels rose from 55.3 to 55.7 while a "marked increase" in new orders led to a stabilisation in backlogs of work.

Employment weakened in both sectors, more so in manufacturing however.

"The eurozone stands at a crossroads, with growth either set to pick back up in coming months or continue to falter following the initial post-lockdown rebound," said IHS Markit's Economics Director, Andrew Harker.

"The path taken will likely depend in large part on how successfully COVID-19 can be suppressed and whether companies and their customers alike can gain the confidence necessary to support growth."