A reading below 50 indicates a contraction and August’s preliminary estimate was the lowest since February 2021.
A downturn in Germany, Europe’s largest economy, deepened in August, a separate PMI survey showed, as companies saw demand dampened by a combination of high inflation, rising interest rates and economic uncertainty. In Britain, outside the European Union, private sector growth slowed to a crawl as factory output fell and the larger services sector eked out only a modest expansion, indicating a recession was coming.Suggesting there was little hope of an imminent turnaround in the euro zone, overall demand in the bloc fell for a second month. The new business index came in at 47.7, just ahead of July’s 47.6.
“But they are still very high, and with European gas prices surging and measures of domestic price pressures strong, we expect inflation to remain very high,” said Jack Allen-Reynolds at Capital Economics.