Eurozone PMIs Show Ray of Hope in August, Says Commerzbank

09:08 AM EDT, 08/21/2025 (MT Newswires) -- The composite Purchasing Managers' Index (PMI) for manufacturing and the services sector in the eurozone rose to 51.1 in August from 50.9 in July, noted Commerzbank on Thursday.

Economists surveyed in advance had expected a slight decline, wrote the bank in a note to clients. The mood in the manufacturing sector improved significantly, from 49.8 to 50.5. The index for services, on the other hand, fell slightly, from 51.0 to 50.7.

While the composite PMI in Germany rose only moderately -- from 50.6 to 50.9 -- it increased more sizeably in France from 48.6 to 49.8. However, the composite PMI in France has fluctuated noticeably over the last 12 months. The smaller increase in the PMI in the eurozone also suggests that the trend in other euro area economies was weaker than in France and Germany, stated Commerzbank.

Thursday's figure implies that the sentiment indicator for the eurozone is continuing its modest recovery since the beginning of the year, pointed out the bank. The indicator remains in a range in which the economy has grown slightly in the past. The subdued development also points to only very moderate economic growth this year.

At 50.5, the index for the manufacturing sector in the eurozone has exceeded the 50-point mark for the first time in three years. This means that the purchasing managers surveyed are expecting the manufacturing sector to expand for the first time in three years.

This is surprising given the tariffs imposed by United States President Donald Trump, added Commerzbank. The higher import duties make European Union goods more expensive on the U.S. market and could weigh on eurozone exports.

However, the easing of monetary policy in the eurozone and in many of its trading partners' economies appears to be leading to an increase in new orders in the manufacturing sector. Lower interest rates make it easier to finance investments, for example, and as such stimulate the economy.

The overall mood in the eurozone economy is "mediocre and improving only slowly," according to the bank. Diverging developments within the monetary union highlight the sluggish growth.

This also applies to the economic outlook: Germany is likely to increase its government spending significantly in the coming years, while France and Italy will probably be forced to cut back on spending due to rising interest payments.

As a consequence, overall, Commerzbank predicts only a sluggish recovery of the eurozone economy in the course of this year.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.