The business activity across the euro area declined for a second consecutive month in August as the service sector growth nearly came to a halt, according to a preliimnary report published by S&P Global on Tuesday.
The PMI composite output index tumbled to an 18-month low at 49.2, a sharper decline compared to July, signaling a reduction in business activity after 16 months of growth. Major Eurozone economies led the contraction, with Germany posting the largest output decline since June 2020 and France's activity decreasing for the first time in 18 months.
The manufacturing output index inched up slightly to a 2-month high at 46.5, while on the other hand, manufacturing PMI further declined to a 26-month low at 49.8. Similarly, the services PMI activity index remained just above the no-change mark at 50.2 by landing at a 17-month low. "The latest PMI data for the eurozone point to an economy in contraction during the third quarter of the year," the report concluded.
