Eurozone Composite PMI at 51.6 in August... Below Expected 55

Economic Recovery Slows... Service Industry Takes Major Hit

[Asia Economy Reporter Minwoo Lee] The composite Purchasing Managers' Index (PMI) for August in the 19 Eurozone member countries using the euro within the European Union (EU) fell significantly short of expectations. This is interpreted as the recovery of business activities, which were contracted due to the novel coronavirus disease (COVID-19), being slower than anticipated.

According to Bloomberg on the 21st, the Eurozone composite PMI for August, released by market research firm IHS Markit, was recorded at 51.6. This is below the expected 55.0 as well as the previous month's 54.9.

The PMI is compiled monthly through surveys of purchasing managers in companies regarding new orders, production, inventory, employment, and more. It is an indicator that can gauge business trends in manufacturing, services, and other sectors. Generally, a PMI above 50 indicates economic expansion, while below 50 indicates contraction.

Specifically, both the manufacturing PMI and services PMI fell short of expectations. The manufacturing PMI was 51.8, lower than the expected 52.7 but similar to the previous 51.8. On the other hand, the services PMI was 50.1, significantly below the previous 54.7 and the expected 54.5.

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