European business activity contracted once again during August, to its lowest level since November 2020.
The euro zone’s flash composite purchasing managers’ index, released Wednesday, fell to 47.0 for August from 48.6 in July. This missed economists’ expectations for a figure of 48.8, according to Dow Jones.
A reading above 50 marks an expansion in activity, while one below 50 marks a contraction. If Covid pandemic months are excluded, the latest numbers point to the lowest reading since April 2013.
Cyrus de la Rubia, a chief economist at Hamburg Commercial Bank, said the service sector of the euro zone is “unfortunately showing signs of turning down to match the poor performance of manufacturing.”
In terms of the breakdown between services and manufacturing, the former dropped to a 30-month low at 48.3 and the manufacturing PMI rose slightly from 42.7 in July to 43.7 this month.
“Considering the PMI figures in our GDP [growth] nowcast leads us to the conclusion that the euro zone will shrink by 0.2% in the third quarter,” Rubia added.
https://www.cnbc.com/2023/08/23/european-pmis-for-august-show-steep-downturn-.html