A preliminary estimate showed that the Eurozone Composite PMI fell to 59.5 in August 2021, from a 15-year high in July of 60.2 and slightly below market expectations of 59.7. The latest reading indicated a continued strong expansion in business activity, as service sector growth exceeded manufacturing growth for the first time since the pandemic began, buoyed by the reopening of the economy and a rapid vaccination campaign against Covid-19.
Without the ongoing disruptions to the supply chain, activity could have expanded faster, but fears that new coronavirus strains could lead to renewed restrictions continued to dampen optimism.
A previous survey showed that both the services and manufacturing indices remained firmly in Germany's growth zone, confirming that Europe's largest economy is still on a recovery path.
In France, the eurozone's second-largest economy, business activity growth slowed compared to July but remained resilient, as commodity supply problems and coronavirus health protocols affected businesses.
Companies have increased headcount in the eurozone at a near-record pace but are still unable to finish all the new work coming in, resulting in the backlog at the third-fastest pace in the survey's history.
The services PMI fell to 59.7 from a 15-year high in July of 59.8. Demand slowed only marginally from July - suggesting a continued recovery - but the services business expectations index, which measures optimism about the year ahead, fell to 68.6 from 69.1.