Global Market: Eurozone services growth slows in August, but private sector remains steady

Growth in the eurozone's dominant services sector eased to a two-month low in August, although resilient and broad-based demand helped keep overall private-sector activity stable, a survey showed on Thursday.

The S&P Global Eurozone Services Purchasing Managers' Index (PMI) slipped to 51.6 in August from 51.7 in July, coming in slightly below the preliminary estimate of 51.7.

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The composite PMI, which combines services and manufacturing, stood at 52.0 in August, broadly in line with its long-term average of 52.3. A reading above 50 indicates expansion, suggesting the bloc's private sector continued to grow at a steady, though modest, pace.

According to Reuters, the latest figures point to continued economic resilience in the third quarter, with manufacturing activity gaining momentum while the services sector recovered from weakness earlier in the year.

New business in the services sector, a key measure of demand, increased solidly again in August. However, the rise was driven by domestic demand as new export orders declined. At the broader private-sector level, export orders increased for the first time in four-and-a-half years, supported by stronger demand for manufactured goods.

Services employment also strengthened, growing at its fastest pace in eight months and extending a positive trend that began in June. Across the wider private sector, August marked the first month of net job creation this year.

Price pressures remained elevated. Services input costs and output charges both rose to three-month highs during August. Across the composite index, input cost inflation edged down slightly, while the pace of output price growth was unchanged.

Reuters reported that the latest price data indicated a pause in the euro zone's recent disinflationary trend. Inflationary pressures remained above historical norms and higher than levels recorded before the outbreak of the U.S.-Israeli conflict with Iran.

Official data released earlier this week showed eurozone inflation had risen back above 3% in August, increasing pressure on the European Central Bank as policymakers prepare for their September 10 meeting.

Growth remained uneven across the region. Spain and Italy led the expansion, while Germany recorded its fastest growth since March. France was the main exception, with private-sector activity contracting for an eighth consecutive month.

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