LONDON: Euro zone manufacturing growth slowed to a near two-year low in August as optimism dwindled amid growing fears of an escalating global trade war, a survey showed on Monday.
However, this edition of the survey should be treated with some caution. It only represents about 70 per cent of the usual sample size as swathes of European factories take a break over the summer months, reports AFP.IHS Markit's August final manufacturing Purchasing Managers' Index dropped to a 21-month low of 54.6 from July's 55.1, unchanged from an initial reading, yet still comfortably above the 50 level that separates growth from contraction.
An output index, which feeds into a composite PMI due on Wednesday and is regarded as a good gauge of economic health, nudged up to 54.7 from 54.4.
"Euro zone factories reported a further solid production gain in August, but prospects dimmed further as growth of new orders hit a two-year low and worries about the outlook deepened," said Chris Williamson, chief business economist at IHS Markit.
Forward-looking indicators such as employment, optimism and new orders all fell, suggesting there would be little if any pick-up in activity this month.
The future output index, which measures optimism, fell from 62.4 to 61.0 - its second lowest reading since late 2015.