Eurozone manufacturing activity expanded at its fastest pace in more than four years in August, according to the latest S&P Global PMI survey.
The S&P Global Eurozone Manufacturing PMI increased to 52.7 from 51.9 in July, reaching its highest level since May 2022. The survey data were collected between August 10 and August 21, 2026.
Factory production increased for a third consecutive month, with the Output Index rising to 53.3 from 52.9 in July, its highest reading in four-and-a-half years. Intermediate goods provided the largest contribution to the increase in production.
New orders record strongest increase since early 2022
New factory orders increased at their fastest rate since early 2022, while export business expanded for only the second time in four-and-a-half years.
Austria, Germany and the Netherlands recorded particularly high rates of growth in overseas sales.
Germany, the eurozone’s largest economy, reported its strongest month of manufacturing growth in more than four years, while France also contributed to the overall expansion.
Conditions varied elsewhere in the region. Italy recorded its first contraction since January, while Spain remained in contraction territory.
Purchasing activity increases as supply delays continue
Eurozone manufacturers increased purchasing activity during August following modest reductions in June and July.
Despite the increase in purchases, inventories of inputs continued to decline and did so at a faster rate. Supply-chain pressures also remained evident, with supplier delivery times lengthening sharply during the month.
Manufacturing employment was broadly unchanged, an improvement compared with more than three years of continuous declines. Outstanding orders were also unchanged from July.
Cost inflation eases as business confidence improves
Input costs continued to increase in August, but the rate of inflation slowed to its lowest level in six months.
Price increases for both manufacturing inputs and finished goods nevertheless remained above levels recorded before the start of the Middle East conflict.
Business confidence improved for a fourth consecutive month. Manufacturers’ expectations for output growth over the next 12 months also moved above their long-term average.
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