Global business activity showed a further slowdown last month as service companies struggled with weak demand as rising prices and borrowing costs caused indebted consumers to rein in spending.
In the euro zone, the outlook was bleaker than previously thought as the services sector fell into contraction territory, suggesting the bloc could slip into recession.
Germany’s services sector contracted for the first time this year, and France’s shrank more than previously projected. In the United Kingdom, which is not a member of the European Union, its survey revealed the greatest economic downturn in seven months.
August’s Asian surveys were also more pessimistic: services activity in China expanded at the slowest pace in eight months as weak demand continued to weigh on the world’s second-largest economy, while growth in India lost some steam.
Japan was the exception, as activity grew at its fastest pace in three months, driven by strong consumer spending and a recovery in tourism.
S&P Global’s Eurozone Composite Purchasing Managers’ Index (PMI) fell to 46.7 points in August, a low not seen since November 2020 and for the third consecutive month below the 50 mark, which separates growth from contraction.
The figures point to a 0.1% contraction in euro zone gross domestic product this quarter, S&P Global said.
The bloc’s services PMI sank to 47.9 points from 50.9 in July. Services PMIs for the UK, Germany, and France were below break-even.
