August data signalled a further expansion of the eurozone manufacturing sector, as continued growth in Germany, Italy, Spain, the Netherlands, Austria and Ireland offset the ongoing contractions in France and Greece.
At 52.3 in August, the final seasonally adjusted Eurozone Manufacturing PMI® was only a shade below its earlier flash estimate and July’s final posting (both 52.4). The average PMI reading so far in the third quarter (52.4) is, however, slightly above that for quarter two (52.3).
Eurozone manufacturers reported further solid expansions of production and new business, with rates of increase improving to the quickest since May 2014 and April 2014 respectively. Demand improved in both domestic and export markets, as highlighted by a solid and accelerated increase in new export business.
This supported further job creation, as companies raised employment at the quickest pace in four years. Increases in staffing also reflected rising pressure on capacity. Backlogs of work rose for the fourth month running, and to the greatest extent since April of last year.
National survey data signalled that only one nation, Germany, saw improved rates of expansion for both production and new orders. This was underpinned by the fastest expansion of new export business in one-and-a-half years and the steepest job creation since January 2012.
Output growth also improved in Spain, despite slower increases in both new orders and new export business. Italy, the Netherlands, Austria and Ireland also all registered higher levels of production and new orders, although rates of expansion were slower across the board. Employment rose in Italy, Spain, the Netherlands and Ireland, but fell slightly in Austria.
The weakest performer remained Greece. Greek manufacturers continued to report steep reductions in output, new orders, new export business and employment, but the rates of contraction all slowed sharply from the multi-year and record rates signalled in July. France reported accelerated falls in output, new orders and employment.
Average output prices at eurozone manufacturers rose slightly for the fourth time in the past five months in August. Selling prices increased in Germany, Italy and the Netherlands, but were lowered in the other nations covered by the survey.
In contrast, average input costs fell for the first time in six months, mainly centred on Germany and Italy – with Germany in particular reporting lower energy prices. Although all of the other nations covered by the survey reported increased purchasing costs, rates of inflation were slower than in July.