Europe August Flash PMIs Stronger Activity But Mixed Price Pressures Across the Channel

Economics Research 21 August 2026 | 11:49AM BST

Europe August Flash PMIs: Stronger Activity But Mixed Price Pressures Across the Channel

BOTTOM LINE: The Euro area composite PMI edged up by 0.1pt to 52.1 in August, Katya Vashkinskaya | above expectations for a slight decline. The rise reflected an improvement in Goldman Sachs International manufacturing but a sideways move in services, as the periphery offset the weakness Giovanni Pierdomenico in France and Germany. Services activity stayed at 51.7, while manufacturing output | increased by 0.5pt to 53.4, the highest level since February 2022, driven by Goldman Sachs International

improvements in core Europe. Composite price components softened further but remain stronger than prior to the conflict in the Middle East. The UK composite PMI also surprised to the upside in August, increasing by 0.3pt to 52.5. This reflected ongoing strength in services but a setback in manufacturing. Composite price components firmed up again and remain above the Euro area.

Note: The responses were collected between 10 and 19 August in Germany and the Euro area, and between 12 and 19 August in France and the UK.

n Euro Area Composite PMI (August): 52.1, GS 51.8, consensus 51.7, last 52.0 o Euro Area Manufacturing PMI (August): 52.8, GS 51.8, consensus 51.8, last 51.9 o Euro Area Services PMI (August): 51.7, GS 51.5, consensus 51.5, last 51.7 n France Composite PMI (August): 48.8, GS 49.4 consensus 49.5, last 49.4 n Germany Composite PMI (August): 51.0, GS 51.3, consensus 51.3, last 51.3 n UK Composite PMI (August): 52.5, GS 51.6, consensus 51.6, last 52.2

1. The Euro area composite PMI edged up by 0.1pt to 52.1 in August, above expectations for a slight decline. The rise reflected an improvement in manufacturing but a sideways move in services, as the periphery offset the weakness in France and Germany. Services activity stayed at 51.7, while manufacturing output increased by 0.5pt to 53.4, the highest level since February 2022, driven by improvements in core Europe. Composite employment ticked up to 50.7, reflecting an increase in both manufacturing and services, and new orders also rose to a recent high of 52.2. Composite price components softened further. Input prices ticked down by 0.3pt to 62.6 (vs. 59.0 in February and a peak of 69.9). Output prices edged down by 0.7pt to 54.0 (vs. 53.1 in February and a peak of 57.1). Despite a generally improving picture, confidence among companies in the Euro area softened slightly during the month, driven by services.

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n France: Composite output declined by 0.6pt to 48.8 in August, below expectations. The deterioration was driven by the services sector, where the activity index fell 1.2pt to 48.4, suggesting further services sector contraction, while manufacturing output rose to 50.7, its highest value since April. Composite new orders fell by 1.9pt to 48.8, with export orders edging lower, while composite employment remained soft but improved somewhat (+1.2pt to 49.2). Input prices moderated further (-0.6pt to 59.5), driven by the manufacturing sector. Composite output prices edged down by 0.1pt to 53.0, driven by services. The release noted that “services companies reported a quicker rise in operating expenses”, while “in some cases, extreme heat was cited as a reason for lower activity levels in services”. n Germany: The German composite PMI was weaker than expected at 51.0, vs. 51.3 in July. This, however, masks a notable divergence across sectors. As services activity declined 1.3pt to 48.5, manufacturing output rose by 2.0pt to 56.7, the highest level since January 2022. Composite new orders, including from abroad, were firm, rising further to 51.7. Composite employment crossed 50 for the first time in more than two years, suggesting tentative signs of a stabilisation in the German labour market in August. Respondents cited “support to demand from stockbuilding, increased defence spending and data centre build-outs”, while for services, “a second successive…