In this series, we’ve discussed how business activity has fared in the Eurozone in August. Let’s take a deeper look at certain prominent Eurozone economies to assess how businesses have performed in those regions. Let’s start with the Markit PMI (Purchasing Managers’ Index) readings for the “big four” Eurozone economies: Spain, France, Italy, and Germany.
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The Markit/ADACI Italy Manufacturing PMI for August slipped to a 53.8 level, down from July’s four-year-high of 55.3. The August PMI reading was well supported by an increase in new orders at manufacturers. Output rose, albeit at a slower pace than July. Manufacturing in Italy (EWI) entered the third quarter on a very positive note. In August, business continued to expand, although weighed down by the global economic slowdown.
The Markit France Manufacturing PMI came in at 48.3 in August, down from the 49.6 recorded in July. Manufacturing in France (EWQ) has been contracting since the second quarter. Output, employment, and new orders fell, signaling deterioration in operating conditions for businesses in France.
Although the Markit Spain Manufacturing PMI for August eased from July’s figures, the reading remained strong at 53.2 in August. July recorded a 53.6 index level. Spain (EWP) saw weaker growth in new orders, although output and employment gained despite the fall in the headline index. Spain has been benefiting from the European Central Bank’s monetary stimulus plan.
The Markit/BME Germany Manufacturing PMI report that came in on September 1 states, “Operating conditions at German manufacturing companies improved at the fastest pace in 16 months during August.” The August reading came in at a 53.3, a 1.5-point improvement from July’s 51.8. Production and output gained pace in August, rising at a five-month high rate. New business, both domestic and abroad, also improved. Employment saw the strongest increase in more than three years.
The weaker euro is finally helping German (EWG) exports, which noted an increase in new orders from the United States and the Middle East. For now, German manufacturing seems to be stuck in low gear. Growth in new business for exporters in Germany slowed in July, affecting overall manufacturing. US companies such as Exxon Mobil (XOM), General Motors (GM), Ford (F), and General Electric (GE) have invested heavily in their German operations. Services continued to report stronger growth than manufacturers in Germany.
While Germany and Spain recorded good growth in manufacturing, Poland slowed. The Netherlands dropped, although it recorded a strong expansionary reading in August. Let’s take a look.