Euro zone factory activity contracted in August as consumers stay cautious - SABC News - Breaking news, special reports, world, business, sport coverage of all South African current events. Africa's news leader.

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Manufacturing activity across the euro zone shrank for a second month in August, according to a survey which showed weak demand meant factories were unable to sell as much as they made.

As in many other parts of the world, Europe is enduring a cost of living crisis, and faced with soaring energy and food bills many consumers are reining in their spending.

An index measuring output, which feeds into a composite PMI due on Monday and is seen as a good guide to economic health, nudged up to 46.5 from 46.3 but marked its third month of sub-50 readings. “Forward-looking indicators suggest that the downturn is likely to intensify — potentially markedly — in coming months, meaning recession risks have risen.”

A stocks of finished goods index climbed to 53.3 from 52.5,the highest since the survey began in mid-1997.

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