Eurozone Manufacturing Hits 51-Month High as France and Germany Grow

The Eurozone manufacturing sector strengthened in August, with the Purchasing Managers' Index rising to 52.7, the highest level in 51 months. This growth was driven by a recovery in export demand and the fastest surge in new factory orders since early 2022. Germany recorded its strongest growth in over four years, with its index rising to 54.3 due to stockpiling, data center build-outs, and defense spending.

S&P Global reported that France's manufacturing sector also expanded, with its index rising to 51.1 from 49.8 in July. While output volumes increased for the first time since April, the growth was lower than initial flash estimates. Joe Hayes, a senior principal economist at S&P Global Market Intelligence, described the French expansion as unconvincing, noting that aggressive destocking and weak demand limited optimism.

In contrast to the Eurozone's strength, Britain's manufacturing sector saw activity growth slow in August, with its index slipping to 51.7, the lowest level since March. British factories increased hiring at the fastest pace in over two years to address work backlogs, even as output growth hit its weakest point since April. While business optimism in Britain reached a six-month high, the broader Eurozone recovery remained uneven, as Italy returned to contraction and Spain remained below the 50-point growth threshold.