Eurozone Manufacturing Growth Hits Four-Year High Amid Ongoing Inflation

Growth in the eurozone's manufacturing sector has hit its highest level in nearly four and a half years, according to a survey released by S&P Global.

The manufacturing purchasing managers' index rose to 52.7 in August from 51.9 in July, surpassing the 50.0 mark that separates contraction from expansion.

Factory output and incoming new order volumes both rose at their quickest rates since early-2022, supporting renewed purchasing activity growth and a pick-up in business confidence.

S&P Global Market Intelligence's senior principal economist Joe Hayes noted that the eurozone's industrial economy has shaken off the oil price shock and supply-related disruptions caused by the Middle East war.

The intermediate goods sub-sector was the main contributor to manufacturing growth, including critical industries such as chemicals and metals, electrical equipment, and electronic components. This suggests the euro area can benefit from the tech supercycle, even if it's arriving late to the party.