Euro zone factory activity mired in contraction in August

The data suggest that a recovery of the euro zone economy could be some way off as demand fell at its sharpest pace this year.

HCOB‘s final euro zone manufacturing Purchasing Managers‘ Index (PMI), compiled by S&P Global, stood at 45.8 in August, just above the 45.6 preliminary estimate but firmly below the 50 mark separating growth from contraction.

The index covering new orders sank to 43.3 from 44.1, its lowest since December. Demand from abroad also fell at the fastest rate this year.

“Things are going downhill, and fast. The manufacturing sector has been stuck in a rut, with business conditions worsening at the same solid pace for three straight months, pushing the recession to a gruelling 26 months and continuing,” said Cyrus de la Rubia at Hamburg Commercial Bank.

The slump in German manufacturing accelerated, while activity in France contracted at the fastest pace since January. The final German manufacturing Purchasing Managers‘ Index (PMI) dropped from 43.2 in July to 42.4 in August.

Source: reuters.com