Eurozone Services Activity Continues to Grow

The S&P Global Eurozone Services PMI was inched down to 51.6 in August of 2026 from 51.7 in the previous month, revised marginally lower from the flash estimate of 51.7 but still remaining close to the initial market expectations of 51.5. The result consolidated the recovery in the Eurozone's services sector after the war in the Middle East triggered a surge in energy prices that resulted in PMI contractions in the three months to June. New orders grew as domestic demand in respective bloc countries outpaced export orders. New business levels rose more than those of output, even though firms continued to deplete their backlogs. The mark of resilience in demand drove companies to raise employment the most in eight months. Still, input costs rose to three-month highs as wholesale energy costs regained traction in the period.

The S&P Global Eurozone Services PMI was unchanged at 51.7 in August 2026, slightly above market expectations of 51.5, according to flash estimates. The reading remained at its highest level since February, with rising tourism spending helping to support economic growth, particularly outside France and Germany, where the region recorded its fastest pace of services growth in more than three years. New export orders remained stable, while service providers also increased the pace of job creation during the month. Regarding prices, input costs rose at a slightly faster pace than in July, while the increase in output prices moderated, potentially marking the joint-lowest rate so far this year, alongside March. However, business confidence in the sector weakened, suggesting that firms were cautious about the year-ahead outlook.

The S&P Global Eurozone Services PMI rose to 51.7 in July of 2026 from 49.4 in June, the highest in five months, revised marginally higher from the flash estimate of 51.6 and well above the initial estimate consensus of 49.8. The result reflected improving economic conditions as the momentary truce between the US and Iran lowered energy prices and improved margins for the European services sector. New business wins rebounded in the period, even though most new contracts were with domestic clients, while backlogs were depleted. Consequently, higher capacity demand supported a mild increase in employment levels. Meanwhile, input cost inflation fell the most since February, leading to a similar slowdown in output charges. Looking ahead, Eurozone services providers displayed greater optimism on the year ahead.