Manufacturing led the August uptick, with Germany's factory output at a 55-month high and hiring resuming. S&P Global sees 0.3% Q3 GDP and a hawkish ECB bias.
Alpha Score of 52 reflects moderate overall profile with weak momentum, moderate value, moderate quality, moderate sentiment.
Eurozone private-sector growth edged higher in August, with the PMI Composite Output index rising to 52.1 from 52.0, its highest in nine months. The data points to roughly 0.3% quarter-on-quarter GDP growth in the third quarter, S&P Global said.
Manufacturing drove the improvement. PMI Manufacturing climbed to 52.8 from 51.9, and the Manufacturing Output sub-index hit 53.4, its strongest expansion in four and a half years. Services business activity held at 51.7.
The factory pickup was broad, with sharp differences across countries. Germany posted the biggest gains: PMI Manufacturing jumped to 54.1 from 52.2, and Manufacturing Output surged to 56.7, a 55-month high. Precautionary inventory building tied to Middle East supply disruptions and stronger demand for AI-related equipment and defence hardware drove the upturn, S&P Global said. Services in Germany slipped to 48.5 from 49.8.
France showed a similar sectoral split in the opposite direction. Manufacturing improved to 51.5 from 49.8. Services fell to 48.4 from 49.6, dragging the composite to 48.8 from 49.4.
Growth outside the two largest economies was firmer. Tourism lifted services activity across the rest of the euro area to its fastest pace in more than three years. Employment turned positive for the first time this year, with companies resuming hiring.
Price pressures moved in a more favorable direction. Services selling-price inflation eased to its joint-lowest pace this year, and goods-price inflation moderated further, S&P Global said.
For the European Central Bank, the August PMIs reinforce a relatively hawkish growth-inflation mix. Activity is expanding at a solid clip. Manufacturing momentum is accelerating. Hiring has resumed. The easing in selling-price pressures is welcome. Inflation remains elevated by historical standards. S&P Global concluded the ECB is likely to maintain a hawkish bias, with further rate hikes possible if stronger activity prevents inflation from cooling sufficiently.
For more on how the euro responds to policy divergence, see the EUR/USD profile.
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