Eurozone Business Orders Surge Amid Manufacturing Rally

Eurozone businesses saw new orders increase in August 2024, leading to the highest activity growth in 15 months. Manufacturing showed significant improvement, while services expanded at a slower pace. Inflation pressures persisted, impacting input costs, and ECB policymakers anticipate potential rate cuts by December.

Eurozone businesses witnessed a resurgence in new orders in August for the first time since May 2024, contributing to the most significant expansion in activity over the past 15 months, despite ongoing export challenges, according to a survey released Thursday.

The HCOB Flash Eurozone Composite Purchasing Managers' Index, compiled by S&P Global, climbed to 51.1 in August, up from July's 50.9, marking the third successive monthly increase and reaching its highest level since May. Market expectations, as per a Reuters poll, had anticipated a slight dip to 50.7.

The manufacturing sector spearheaded the upswing, with its PMI rising to 50.5, the first move into expansion territory in over three years, while inflation pressures heightened in the services sector, reflecting intensified input costs.

(With inputs from agencies.)