Euro zone overall business growth held steady in August, PMI shows

The euro zone's leading services sector experienced a two-month low in growth during August, according to a survey released on Thursday. However, the overall private sector activity remained steady, with the S&P Global Eurozone Services PMI falling slightly to 51.6 from 51.7. The index, which comprises services and manufacturing, was close to its long-run average of 52.3, indicating a steady expansion of the private sector.

Despite a brief dip in August due to energy price surges following the Middle East war, new business in services surged, driven by domestic sales. The sector's employment growth reached its fastest pace in eight months, indicating a positive trend since June. In the broader private sector, August marked the first month of net job creation this year.

The services sector faced increasing costs, with input costs and output charges reaching three-month highs. While output price growth remained unchanged, the European Central Bank may consider tightening policy at its upcoming meeting, given the resilience in economic activity and persistent inflation above 3%. Spain, Italy, and France showed growth, with Germany experiencing its fastest expansion since March. France, however, continued its eighth consecutive month of declining activity.