Manufacturing slows in Europe in August

The European manufacturing appears static, anticipating a new phase of economic stagnation in the second half of the year. According to the analysis conducted by Markit, the Eurozone economy in August continued to increase at a steady pace, although the manufacturing PMI fell to 51.8 points from 52 in July, ranking the lowest level in three months. The preliminary figure released today, while still expanding area, indicates that it remains above the critical threshold of 50 points, lower than expected indicating 52 points.

Better instead the services PMI, expected to improve to 53.1 points from 52.9 in July, on three-month high. The composite PMI should therefore settle at 53.3 points from 53.2.

Analyzing the major eurozone economies, the manufacturing is expanding both in Germany (53.6 points to 53.8) and in France (48.5 from 48.6). "The August flash PMI index indicates that the third quarter Eurozone growth rate remains constant, no derailment signals to the uncertainties on Brexit" said the chief economist at Markit Chris Williamson, suggesting how the GDP is growing 1.2% per year.

"While the resilience of the August PMI will reinforce the ECB's belief that the near further intervention is not necessary, the weakness of the overall pace of expansion and disappointing employment trends, incoming orders, optimism and price lead us to consider that the monetary policy makers will leave a door open to further stimulus later in the year, "added Williamson.