Although factories in the eurozone are still experiencing contraction, Asian and British manufacturers are showing signs of recovery. However, concerns over slowing US growth and uncertainty about the presidential election are clouding the trade outlook.
The final euro zone manufacturing Purchasing Managers’ Index (PMI) stood at 45.8 in August, indicating a lack of immediate and vigorous recovery in the industrial sector. New orders hit a low, with demand from abroad also decreasing.
Despite eurozone manufacturers raising their prices for the first time in 16 months, overall inflation in the currency bloc fell to a three-year low of 2.2% in August. The European Central Bank is expected to cut its deposit rate twice more this year.
In Germany, the downturn in manufacturing accelerated, while France experienced the fastest contraction since January. On the other hand, British factories had their strongest month in over two years, which is good news for Prime Minister Keir Starmer’s efforts to boost economic growth.
This mixed bag of manufacturing data suggests that while there are signs of recovery in some regions, the global economic landscape remains uncertain.
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