Eurozone Private Sector Logs Robust Growth

(RTTNews) - The euro area private sector posted robust growth in August as the industrial economy gained momentum and services activity expanded for a second consecutive month, final survey data from S&P Global showed Thursday.

The final composite output index posted 52.0 in August, unchanged from July's eight-month high and slightly down from the flash score of 52.1.

The services Purchasing Managers' Index dropped to a two-month low of 51.6 from 51.7 in July. The flash score was also 51.7.

The survey showed that employment grew for the first time in the year-to-date on strong sales growth. Despite capacity enhancements, backlogs of work were cleared at a slower pace in August.

Regarding prices, the survey showed that input cost inflation ticked down, while output price rises were equal to those recorded in July. Finally, business sentiment held steady.

Taken alongside the current inflationary trend and the resilience in economic activity as illustrated by the latest figures, the European Central Bank may feel a tightening of policy at next week's meeting is now justified, S&P Global Market Intelligence Senior Principal Economist Joe Hayes said.

National level PMI data revealed that Spain and Italy remained the key contributor to growth, with both economies posting marked expansions in overall economic activity levels.

Spain's private sector expanded for the fourth successive month in August. The composite index registered 55.8 but down from 56.5 in July. Similarly, the services PMI dropped to 57.8 from 58.3 in July.

Italy's private sector expanded at the strongest pace in over three years in August, underpinned by services activity. The composite output index posted 53.6 in August, up 52.5 in July. The services PMI advanced to 55.2 from 52.5 in the prior month. Although Germany's upturn was comparatively more moderate, the pace of growth was the quickest since March. The composite output index hit 51.8, up from 51.3 in August. The initial score was 51.0.

Germany's services activity remained in the contraction territory with the index registering 49.7 compared to 49.8 in July. The flash score was 48.5.

France bucked the broad trend of growth, registering an eighth successive contraction in business activity. The composite output index fell to 48.5 in August from 49.4 in the prior month and stayed below the flash reading of 48.8. At 48.0, the services PMI slid from 49.6 in the previous month and also came in below the flash 48.4.