Eurozone Manufacturing Growth Hits Four-and-a-Half Year High

The eurozone's manufacturing sector has reached its highest level in four and a half years, according to a recent survey. The S&P Global manufacturing purchasing managers' index rose to 52.7 in August from 51.9 in July.

This marks the highest level since May 2022 and surpasses the 50.0 threshold that separates contraction from expansion. Factory output and new order volumes have also increased at their quickest rates since early-2022, supporting a growth in purchasing activity and business confidence.

Inflation has continued its downward trend, but remains above pre-conflict levels. The August PMI report suggests the eurozone's industrial economy has recovered from oil price shocks and supply disruptions caused by the Middle East war.

Joe Hayes, senior principal economist at S&P Global Market Intelligence, said the expansion should be sustained by stronger order book growth, partly due to a recovery in export demand. The intermediate goods sub-sector was the main contributor to manufacturing growth, which includes critical industries such as chemicals and metals.