Eurozone manufacturing shows signs of recovery led by Germany

August data indicates signs of an industrial recovery across the Eurozone, with manufacturing PMI indices remaining in expansion territory for three major markets. The European manufacturing PMI rose by 0.8 points to 52.7, marking its highest performance since May 2022. This growth is supported by an acceleration in new orders and improved export demand.

Economic performance varies significantly by country. Germany is showing signs of a recovery with its PMI jumping to 54.3, driven largely by the intermediate goods sector, though some companies like Volvo report only stable activity. Italy and Spain are experiencing very positive dynamics fueled by strong service sector activity. In contrast, France has seen a decline, with its composite PMI falling to 48.5, indicating a contraction in overall activity.

While the outlook is improving, cost pressures remain a risk to corporate profitability for the second half of the year. Employment levels are also showing the first signs of stabilization.