The economic expansion in the eurozone accelerated.
The growth pace of the Eurozone economy picked up in August, as per a survey. The purchasing managers' index climbed to 51.2 points from 50.2 in July, according to financial services provider S&P Global, announced on Thursday.
This index, which surveys business managers to gauge economic conditions, is significant as it often forecasts the economy. Any value above 50 indicates growth. Experts anticipated a minor dip to 50.1 points, as reported by news agency Reuters.
The surge predominantly stemmed from an upsurge in business activity in France's service sector, mentioned Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, which supports the survey. The French service sector index witnessed a notable boost of almost 5 points to 55.0. De la Rubia speculates that this spike might be due to the Paris Olympics, contributing to the boom in the service sector. However, it's uncertain whether this momentum will persist in the subsequent months. The expansion in Germany's service sector has considerably slowed down, and the downturn in Eurozone manufacturing continues unabated.
The Eurozone economy continued its modest growth rate in the spring. The gross domestic product (GDP) expanded by 0.3% in the timeframe of April to June compared to the first quarter. The growth rate remained at 0.3% since the beginning of the year.
The boost in the Eurozone economy's growth rate in August, as indicated by the Purchasing Managers' index, was significantly above the anticipated minor dip. Analysts will closely monitor if this improved growth rate can be sustained in the coming months.
Despite the growth in the service sector of France and the overall economy's modest growth rate in the spring, the expansion in Germany's service sector has decelerated, and the downturn in Eurozone manufacturing persists.
