Germany's manufacturing activity rose to 54.1 on the back of defense contracts
Manufacturing activity in Germany rose to 54.1 points in August, compared with an expected 52.0, while activity in the services sector fell to 48.5 points. The composite business activity index stood at 51.0 points—below the forecast of 51.3 and the July reading of 51.3, according to The Rio Times, citing preliminary HCOB surveys.
A reading above 50 points indicates growth in activity, while a reading below this level indicates a contraction. Production, new orders, and export sales in German industry showed the fastest growth since the beginning of 2022. The survey’s authors attributed the recovery to a rebound following a weak second quarter, the impact of rising defense spending, and inventory buildup due to prolonged supply disruptions.
According to the survey’s compilers, German industry is also being driven by rising demand for artificial intelligence-related equipment. Meanwhile, in the services sector, where actual activity declined, companies reported continued growth in new business and employment.
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In the eurozone, the composite business activity index rose from 52.0 in July to 52.1 points in August—a nine-month high. The manufacturing index reached 52.8 points, while factory output hit a 54-month high. New export orders rose for the first time in about four and a half years. Survey compilers estimated the eurozone’s economic growth rate in the third quarter at approximately 0.3%.
In the United Kingdom, net public-sector borrowing in July totaled 1.8 billion pounds, exceeding the budget watchdog’s forecast by 2.3 billion pounds. The country’s net public debt stood at 94.1% of GDP, or 2,984.9 billion pounds. Retail sales in July fell by 0.5% compared with June.
The next meeting of the Governing Council of the European Central Bank is scheduled for September 9–10 in Berlin. The ECB’s deposit rate stands at 2.25%: it was raised on June 17 and left unchanged on July 23.
