Eurozone Manufacturing PMI Eases But Stays In Expansion

A survey on Tuesday, September 1 showed that Eurozone manufacturing activity remained on a recovery path last month, but factory managers were wary of investment and employment as the coronavirus pandemic spreads.

Industrial production, which had not experienced a sharp decline like the service sector during the pandemic, rose for the second month in a row.

The final reading of the IHS Market Manufacturing Purchasing Managers’ Index fell to 51.7 from 51.8 in July, in line with the preliminary reading released earlier and comfortably rising above the 50 mark that separates growth from contraction.

An index measuring change in production rose to 55.6 from 55.3, just below the initial reading of 55.7 but at the highest level since April 2018. This indicator feeds a composite index of purchasing managers due out on Thursday and is seen as a good measure of the economy’s resilience.

Although optimism is at its highest in two years, factories have reduced the number of workers and ordered fewer raw materials. The employment index fell significantly from parity to 44.2, although it came close to that level compared to July’s reading of 42.9.