Manufacturing activity in the euro zone expanded at the slowest rate in 13-months in August, fuelling concerns over the region’s growth outlook, preliminary data showed on Thursday.
In a report, market research group Markit said that its preliminary manufacturing purchasing managers’ index fell to a seasonally adjusted 50.8 this month, down from a final reading of 51.8 in July. Analysts had expected the index to ease down to 51.3 in August.
Meanwhile, the preliminary services purchasing managers’ declined to a seasonally adjusted 53.5 in August, in line with expectations and down from a reading of 54.2 in July.
The seasonally adjusted Markit Flash Euro Zone Composite Output Index, which measures the combined output of both the manufacturing and service sectors fell from 52.8 in July to a two-month low of 53.8 in August.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Commenting on the report, Chris Williamson, Chief Economist at Markit said that, “The region remains on course to register growth of only around 0.3%-0.4% in the third quarter, a level that is unlikely to stimulate any real turnaround in the labor market."
Following the release of the data, the euro trimmed gains against the U.S. dollar, with EUR/USD rising 0.07% to trade at 1.3268, compared to 1.3274 ahead of the report.
Meanwhile, European stock markets remained higher. The DJ Euro Stoxx 50 rose 0.6%, Germany's DAX picked up 0.5%, France’s CAC 40 advanced 0.55%, while London’s FTSE 100 tacked on 0.25%.