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Euro Zone Factory Growth Eases in August Despite Modest Price Rises – PMI

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Euro zone manufacturing growth eased last month, despite factories barely raising prices, adding to the European Central Bank’s woes as it battles to spur expansion and inflation, a survey showed.

Tuesday’s disappointing readings come almost half a year after the ECB began pumping 60 billion euros a month of fresh cash into the economy and a day after official data showed inflation in the 19-country bloc at just 0.2 percent.

With inflation so far below the ECB’s 2 percent target ceiling there is a growing chance the ECB will have to extend

its stimulus program beyond the planned completion in September 2016.

Markit’s final manufacturing Purchasing Managers’ Index was 52.3 last month, below an earlier flash reading that suggested it had held steady at July’s 52.4. It has, however, been above the 50 mark that separates growth from contraction for over two years.

An index measuring output that feeds into a composite PMI, due on Thursday and seen as a good guide to growth, rose to 53.9 from 53.6, above the preliminary 53.8 reading.

Reuters

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.
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