Paris Olympics, services sector boost August eurozone business activity

LONDON (ICIS)–Business activity in the eurozone rose in August, driven by the services sector, which grew at the fastest pace in four months.

Growth in services was largely due to the strongest expansion in France since May 2022 as the Olympics took place in Paris, according to S&P Global’s latest Purchasing Managers Index (PMI) data.

This drove the flash services August PMI index to 53.3, up from 51.9 in July, which in turn helped push the HCOB (Hamburg Commercial Bank) composite PMI index to a three-month high of 51.2.

Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, warned, however, that the uplift could be temporary.

“The boost largely comes from a surge in services activity in France, with the Business Activity Index jumping by almost five points, likely linked to the buzz surrounding the Olympic Games in Paris,” he said.

“It’s doubtful this momentum will carry over into the coming months, however. Meanwhile, the overall pace of growth in the services sector has slowed down in Germany, and the eurozone’s manufacturing sector remains in rapid decline.”

S&P’s August eurozone manufacturing PMI was at an eight-month low of 45.6, down slightly from July. An index figure above 50 indicates expansion and below 50 contraction.

Elsewhere, the latest PMI data for the UK showed a significant increase in private sector business activity, with the composite index rising to a four-month high of 53.4.

“August is witnessing a welcome combination of stronger economic growth, improved job creation and lower inflation, according to provisional PMI survey data,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.