{"id":436679,"date":"2026-08-21T15:00:23","date_gmt":"2026-08-21T08:00:23","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/euro-area-business-activity-sees-further-pick-up-in-august-despite-france-germany-softness-436679\/"},"modified":"2026-08-21T15:00:23","modified_gmt":"2026-08-21T08:00:23","slug":"euro-area-business-activity-sees-further-pick-up-in-august-despite-france-germany-softness","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/euro-area-business-activity-sees-further-pick-up-in-august-despite-france-germany-softness-436679\/","title":{"rendered":"Euro area business activity sees further pick up in August despite France, Germany softness"},"content":{"rendered":"<div>\n<ul>\n<li>August flash services PMI 51.7 vs 51.5 expected<\/li>\n<li>Prior 51.7<\/li>\n<li>August flash manufacturing PMI 52.8 vs 51.8 expected<\/li>\n<li>Prior 51.9<\/li>\n<li>August flash composite PMI 52.1 vs 51.7 expected<\/li>\n<li>Prior 52.0<\/li>\n<\/ul>\n<p style=\"text-align: justify\" class=\"text-align-justify\">After the misses from France and Germany, this is a bit of a surprise &#8211; especially the services sector estimate. The pace of expansion in the services sector was unchanged from July but comes in better than what we saw from Europe&#8217;s two largest economies, with growth outside of the region picking up considerably. Who needs France and Germany eh?<\/p>\n<p style=\"text-align: justify\" class=\"text-align-justify\">Meanwhile, the manufacturing sector also performed well with the index there climbing to a 51-month high as manufacturing output hits a 54-month high in August.<\/p>\n<p style=\"text-align: justify\" class=\"text-align-justify\">All in all, a further rise in both output and new orders with a first\u00a0expansion in new export business in roughly four-and-a-half years is helping to bolster private sector activity in Q2. That will help to ease any further stagflation concerns for the ECB, even if France and Germany in particular are likely to come under more scrutiny in the months ahead.<\/p>\n<p style=\"text-align: justify\" class=\"text-align-justify\">Looking to price pressures, input\u00a0cost inflation eased to the weakest since<br \/>\nFebruary but remained sharp and was still some way above the levels seen before the Middle East conflict started. So, there&#8217;s that.<\/p>\n<p style=\"text-align: justify\" class=\"text-align-justify\">S&amp;P Global notes that:<\/p>\n<blockquote style=\"text-align: justify\" class=\"text-align-justify\"><p>&#8220;A sustained solid rise in business activity in August sets<br \/>\nthe eurozone up for a robust increase in third quarter GDP<br \/>\nof around 0.3%. The manufacturing sector is again the star<br \/>\nperformer, enjoying its strongest growth for four-and-a-half<br \/>\nyears, with the services economy providing a supporting<br \/>\nrole, notching up another month of decent growth after the<br \/>\nmalaise seen in the second quarter.\n<\/p><\/blockquote>\n<blockquote style=\"text-align: justify\" class=\"text-align-justify\"><p>\u201cWe are again seeing reports of precautionary stock building<br \/>\nhelping support the goods-producing sector amid the<br \/>\nongoing supply chain disruptions emanating out of the Middle<br \/>\nEast, with supply chain delays again remaining worryingly<br \/>\nwidespread in August. However, there are also encouraging<br \/>\nsigns of rising demand for AI-related tech goods and rising<br \/>\nequipment demand thanks to higher defence spending,<br \/>\nnotably helping Germany in particular achieve increasingly<br \/>\nimpressive production gains.\n<\/p><\/blockquote>\n<blockquote style=\"text-align: justify\" class=\"text-align-justify\"><p>\u201cIn the service sector, rising tourism spending is helping boost<br \/>\neconomic growth, notably outside of France and Germany,<br \/>\nwhere the region collectively saw the fastest services growth<br \/>\nfor over three years.\n<\/p><\/blockquote>\n<blockquote style=\"text-align: justify\" class=\"text-align-justify\"><p>\u201cAlthough high prices reportedly continue to dampen<br \/>\ndemand, price pressures have shown signs of further easing.<br \/>\nPolicymakers will be especially encouraged to see services<br \/>\nselling price inflation back down to the joint-lowest so<br \/>\nfar this year (alongside March), with goods price inflation<br \/>\nalso continuing to moderate. However, with the flash PMI<br \/>\nsignalling solid third quarter GDP growth, a return to hiring by<br \/>\ncompanies for the first time this year, and inflation remaining<br \/>\nelevated by historical standards, a hawkish bias is likely to be<br \/>\nmaintained and further imminent rate hikes cannot be ruled<br \/>\nout.\u201d<\/p><\/blockquote>\n<p style=\"text-align: justify\" class=\"text-align-justify\">\n<p>                            This article was written by Justin Low at investinglive.com.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>August flash services PMI 51.7 vs 51.5 expected Prior 51.7 August flash manufacturing PMI 52.8 vs 51.8 expected Prior 51.9 August flash composite PMI 52.1 vs 51.7 expected Prior 52.0 After the&hellip;<\/p>\n","protected":false},"author":216,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[86],"tags":[],"class_list":["post-436679","post","type-post","status-publish","format-standard","hentry","category-market-news"],"_links":{"self":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/436679","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/users\/216"}],"replies":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/comments?post=436679"}],"version-history":[{"count":0,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/436679\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/media?parent=436679"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/categories?post=436679"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/tags?post=436679"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}