MW:Euro-zone manufacturing activity contracts in Aug.
By William L. Watts
FRANKFURT (MarketWatch) -- Manufacturing activity in the 17-nation euro zone contracted in August, while overall private-sector activity continued to grow at a modest pace, according to preliminary purchasing managers index readings for the region released Tuesday. The Markit euro-zone PMI for the manufacturing sector fell to 49.7 from a reading of 50.4 in July, but came in above forecasts for a reading of 49.5. A reading of less than 50 indicates a contraction in activity, while a figure above 50 signals growth. August services PMI slipped to 51.5 from 51.6 in July, while the composite PMI was unchanged at 51.1. Earlier, national data showed activity across both sectors in Germany expanded at the slowest pace since the country's recovery began in 2009. The PMI data "raise the prospect that [euro-zone] economic growth in the third quarter could be even slower than the disappointing 0.2% rise seen in the three months to June," said Chris Williamson, chief economist at Markit.
