The final figure of euro zone manufacturing PMI surprised on the downside of expectations, showing a downward revision compared to the first estimate. The headline figure was downwardly adjusted from 49.7 to 49.0, while no revision was expected. As the first estimate is based on 85% of the monthly replies, this indicates that sentiment weakened significantly further in the period between the first and final estimate.
National PMI’s show that Germany, the Netherlands and Austria held just above the 50 benchmark level, while the manufacturing PMI contracted in Ireland, France, Italy, Spain and Greece. Only the Irish manufacturing PMI rose compared to July, but still remained in contraction territory. New orders fell in all countries, but encouraging was that Greece saw new export orders rise at the fastest pace in over three years, while the index hit a three-month high in Ireland. Manufacturing employment rose for the sixteenth successive month in August, but the rate of job creation slowed. Especially worrying was that Germany saw new orders fall at the fastest rate of all countries, signalling that the euro zone can no longer rely on its growth engine.