Econintersect: The Purchasing Managers’ Index (PMI) continued improvement across the Eurozone in August 2013 except for France. The average across all 17 euro countries was up to 51.4 from 50.3 in July. This was the fourth consecutive month of increases and the second after two years below the 50 level which is the demarcation between expansion and contraction.
Click on graph to view interactive version at Bloomberg. 
The summary from Markit:
- Final Eurozone Manufacturing PMI at 26-month high of 51.4 in August (July: 50.3)
- Growth improves in Germany, the Netherlands, Italy, Austria and Ireland.
- Input prices broadly unchanged since July
Chris Williamson, Chief Economist at Markit said:
“Manufacturing in the euro area continued to show signs of recovery in August. Although gains are still only modest, companies reported the strongest improvement in business conditions for just over two years, with a pick up in new orders growth suggesting the upturn will be sustained into September.
“What’s especially encouraging is that the upturn is broad-based, with PMIs rising in all countries with the exception of France, where business conditions have at least stabilised after the steep downturn reported earlier in the year. Germany, the Netherlands, Austria, Spain and Italy are now all seeing manufacturing grow at the fastest rates for at least two years, and even Greece saw a marked easing in the rate of manufacturing decline.
“Policymakers will be reassured by the data, which add to growing signs of a building recovery for the eurozone economy. However, the fact that companies remain reluctant to take on staff [due to the need to cut costs to boost competitiveness and offset rising oil prices] suggests that there’s a long way to go before the recovery feeds through to a meaningful job market improvement.”
The headline at Macro Business was most descriptive:
“As austerity lifts, so does Europe.”
Sources:
- Eurozone manufacturing recovery gathers pace in August (Press release, Markit, 02 September 2013)
- As austerity lifts, so does Europe (Delusional Economics, Macro Business, 04 September 2013)
