According to S&P Global, economic activity in the eurozone contracted for the second month in a row in August. The cost-of-living crisis forced consumers to cut back on spending, and manufacturers are also affected by supply shortages.
The eurozone Purchasing Managers’ Index (PMI) for the manufacturing and primary services sectors fell to 49.2 points in August from 49.9 points in July.
A PMI index below 50 indicates that the eurozone economic sector is in contraction. It was also the lowest PMI reading since February 2021.
The eurozone services PMI fell from 51.2 to 50.2, slightly above the 50-point line.
The manufacturing PMI fell from 49.8 to 49.7, the lowest level since June 2020.
Andrew Harker, director of economics at S&P Global, said, “The latest PMI data for the eurozone indicates the economy is in a contraction in the third quarter.”
These figures suggest that the economy will not recover in the near future, as demand fell for the second month in a row. The index for new business was 47.7, slightly higher than in July (47.6).