Eurozone Economy Surges to Fastest Pace This Year Amid Strong New Orders
The Eurozone economy is growing at its fastest pace this year, driven by strong new orders and renewed export growth. According to S&P Global's flash PMI surveys for August, the economic bloc has remained resilient despite disruptions from the US-Israeli war on Iran.
The S&P Global Flash Euro zone Composite PMI Output Index reached 52.1 in August, its highest since November. This beats a Reuters poll forecast of 51.7 and indicates growth when readings are above 50.
New orders have risen at their fastest rate in 40 months, while export orders have increased for the first time since Russia invaded Ukraine in February 2022. Bert Colijn at ING said, 'So far, the impact has been far from devastating...the euro zone economy has been quite resilient so far, and momentum remains surprisingly decent.'
However, despite encouraging data, firms were less optimistic about the year-ahead outlook and sentiment remained lower than the series average. Claus Vistesen at Pantheon Macroeconomics said near-term risks are tilted towards headline inflation surging past 3% and reaching just under 4% by the end of the year.