Euro zone August business activity gains Olympic lift, PMI shows
2024.09.04 04:52
LONDON (Reuters) – Euro zone business activity received a boost from France hosting the Olympic Games last month but the malaise in the bloc is likely to return once the Paralympics wraps up as demand remains weak, a survey showed.
HCOB’s composite Purchasing Managers’ Index for countries in the currency union, compiled by S&P Global and seen as a good gauge of overall economic health, jumped to 51.0 in August from July’s 50.2.
That exceeded the 50 mark separating growth from contraction for a sixth consecutive month but was a tad below a preliminary 51.2 estimate.
“The Olympic Games in Paris brought plenty of victories, and the French service sector was certainly among the winners. But the big question is whether this boost is sustainable,” said Cyrus de la Rubia at Hamburg Commercial Bank.
“The positive vibes from the Games and the ongoing Paralympics might carry through into September in part, but we expect the slowdown in growth, which started in May, to likely resume in the coming months.”
Overall demand in the 20-member currency union fell for a third month, suggesting weakness ahead. The composite new business index was below the 50 threshold at 49.1, albeit slightly ahead of July’s 49.0.
A final PMI for the bloc’s dominant services industry leapt to 52.9 from 51.9, offsetting a continued contraction in the manufacturing sector.
But optimism about the year ahead waned among services firms. The business expectations index fell to 59.1 from 60.4, its lowest reading this year.
