Eurozone activity remains stable as France faces private sector contraction

Economic data for August shows a divergence between the Eurozone and France. The Eurozone composite PMI remained in expansion territory at 52.0, supported by a services PMI of 51.6. While domestic demand drove new business in services, rising company costs and selling prices have reached three-month highs, potentially complicating future monetary policy decisions for the European Central Bank.

In contrast, France experienced an acceleration in private sector contraction. The French composite PMI fell to 48.5, down from 49.4 in July. The services sector saw a significant decline, with its PMI dropping to 48 from 49.6 in the previous month. Economists noted that the decline in demand and extreme summer heat may have contributed to the slowdown in French services, marking the eighth consecutive month of contraction for the country.