The euro area manufacturing sector registered another marked expansion during August, latest Purchasing Managers Index (PMI) data showed, although momentum waned once again as the headline index fell to a six-month low. The final reading of the IHS Markit Eurozone Manufacturing PMI for August of 61.4 was down from 62.8 in July. This marked a second successive month in which growth has slowed in the sector since June’s survey record expansion.
The overriding issue was again a lack of components, however, with suppliers either unable to produce enough parts or are facing a lack of shipping capacity to meet logistics demand.
- Goods production across the eurozone continued to expand.
- Total new orders increased for a fourteenth straight month in August, while new export business also grew at a marked rate.
- The Netherlands, Germany and Italy performed particularly well on the export front.
- However, the overall rate of growth in export demand across the eurozone lost momentum in August.
- Supply issues were the primary cause of a shortfall of manufacturing production relative to orders.
- Factory selling prices consequently rose steeply once again, though with some of the upward pressure alleviated by a slight cooling of input cost inflation, albeit with still-high materials prices adding to manufacturers’ problems.
- Employment growth eased only modestly from July’s all-time high as producers remained focused on boosting operating capacity.