The Eurozone composite, at 51.0, is the highest since May. It is up from July (50.2) and above the 50-growth threshold, signalling that the industry is expanding. However, the final composite for August is still 0.2 points less than the flash (51.2). This suggests that the latter half of August performed slightly worse than the earlier half. This is due to a slight decrease in new orders. Employment recorded below the 50-growth threshold, signalling a reduction in workforce across the eurozone private sector for the first time since 2021. However, input price inflation fell, with operating costs reaching the pre-Covid average.

The best-performing countries were Spain (53.5), France (53.1), Ireland (52.6) and Italy (50.8). All of these are expanding except Germany (48.4) which sits below the 50-growth threshold.

The service index, at 52.9, is at a three-month high and is 1 point above July (51.9). It is the main driver of output as the maufacturing index shrinks this month. This is supported by a rise in new business inflows, increased sales and growth in demand.

The Eurozone's RPI is at plus 10 and the RPI-P is at plus 14. Broadly speaking, overall economic activity is within market forecasts.

No revisions are expected to the flash data.

The Composite Purchasing Managers' Index (PMI) provides an estimate of private sector output for the preceding month by combining information obtained from surveys of the manufacturing and service sectors of the economy. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster is output growing (contracting). The report also contains the final estimate of the services PMI. The data are provided by S&P Global using a representative sample of around 5,000 manufacturing and services companies, the former including Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece and the latter Germany, France, Italy, Spain and the Republic of Ireland.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.