The final reading of the euro zone manufacturing PMI for August showed a marginal upward revision compared with the first estimate. The euro zone manufacturing PMI was revised to 51.4 from 51.3 according to the first release and up from 50.3 in the previous month.
The details show that the improvement was broad-based across countries. Only France (confirmed at 49.7) and Greece (48.7 from 47) remain in contraction territory with the pace of decline slowing significantly in Greece. Spain returned to growth in August (51.1 from 49.8), while growth in the sector accelerated in Italy (51.3 from 50.4), Germany (although revised downward from 52 to 51.8), Ireland (52.0 from 51.0) and the Netherlands (53.5 from 50.8). Looking at the details, production, new orders and new export orders all accelerated to the fastest rate since May 2011.
Inflationary pressures on the contrary remains subdued, while employment remained a weak point for the sector with sustained job losses. The manufacturing PMI’s confirm that the euro area economy continues to recover in August with especially the broad-based nature of the recovery encouraging. The rebound in new orders suggests that the outlook remains favourable although we believe that its pace might slow in the coming months.