The sharpest rise in factory output since March 2022, alongside a first monthly rise in new orders in almost three-and-a-half years pushed the HCOB Eurozone Manufacturing PMI above the 50.0 threshold and into expansion territory in August after a prolonged period of decline.
Notably, the renewed uptick in manufacturing demand was driven by domestic markets as new export sales fell for a second successive month.
Meanwhile, inventory levels were depleted at a quicker rate and firms stepped up the pace at which buying volumes were cut. This was despite supplier delivery delays worsening further. Average input costs rose for the first time since March, albeit marginally, whereas prices charged were reduced.
The HCOB Eurozone Manufacturing PMI rose from 49.8 in July to 50.7 in August. This marked the first monthly improvement in operating conditions for goods producers in the single currency union since June 2022.
A sixth successive monthly increase in production was recorded in August. The rate of growth picked up markedly on the month to the quickest since March 2022. Spurring a faster rise in output was a renewed pick-up in demand conditions.
Total new order volumes rose for the first time in close to three-and-a-half years, although this was reflective of a better domestic sales environment as the latest survey data signaled further (and faster) decline in exports.
Despite increased new order intakes, operating capacities were not placed under greater strain. Eurozone manufacturers remained in stock-cutting mode during the latest survey period.
As for prices trends, eurozone manufacturers saw operating expenses increase for the first time in five months, although the uptick was only marginal. Prices charged were discounted fractionally.
Finally, eurozone goods producers looked to the next 12 months with optimism, but there was little change in sentiment when compared with July. Overall, growth expectations held just above their long-term average in August.