Eurozone economic activity unexpectedly rose to a yearly high in August

The HCOB composite eurozone PMI rose to 51.1 in August from 50.9 in the previous month, beating market expectations of 50.7. This marked the strongest growth in the eurozone private sector since May last year, according to preliminary BMI data.

A BMI above 50 indicates an increase in the performance of the economic activity under review, while a reading below 50 indicates a contraction.

The growth was supported by a third consecutive expansion in the services sector and an unexpected rebound in manufacturing.

The services sector PMI came in at 50.7, down from 51.0 expected, while the manufacturing sector PMI came in at 50.5, up from 49.5, moving into growth territory for the first time in three years, up from 49.8 the previous month.

The overall level of new orders rose for the first time in 14 months, despite a decline in new export orders. The signal of new capacity needs prompted companies to add jobs for the sixth month in a row. On the price front, input cost inflation hit a five-month high, with companies raising prices for their products by the most in four months. Despite the better headline figures, business confidence weakened for a second month on the back of US tariffs and economic difficulties in the eurozone.