Business activity in the eurozone improved modestly in August as services growth offset a continued fall in manufacturing output, IHS Markit said.
The final Eurozone Composite Output purchasing managers' index, or PMI, rose to 51.9 in August from 51.5 in July, remaining above the 50.0 threshold that separates expansion from contraction. The latest reading surpassed the preliminary estimate and the Econoday consensus estimate, both at 51.8.
New work expanded and backlogs of unfinished work declined at the fastest rate since November 2014. However, new export work slumped for the 11th straight month, weighing on overall sales growth.
Within the bloc, the German composite PMI index rose to 51.7 in August from July's 50.9. Meanwhile, French business activity growth registered the fastest expansion in nine months, with the relevant composite index climbing to 52.9 from 51.9 in July.
Italy was the only economy to register a slowdown, with the relevant index falling to 50.3 from 51.0 in the previous month.
The Eurozone PMI Services Business Activity Index edged up to 53.5 in August from 53.2 in July.
Business confidence in the eurozone sank to the lowest level since May 2013 amid the ongoing U.S.-China trade dispute and political uncertainty in Europe, with the German business sentiment declining to the lowest since 2012.
Citing the risk of manufacturing sector weakness spilling over to services and households, IHS Chief Business Economist Chris Williamson said the institute expects the European Central Bank to announce renewed stimulus to the economy in its September meeting to "revive demand and stem the spreading malaise."
