Factories in the euro zone continued to struggle in August, with manufacturing activity remaining in contraction, according to the latest data from HCOB's Purchasing Managers' Index (PMI), which registered at 45.8. Although slightly above the initial estimate of 45.6, the figure remained well below the 50 mark, indicating ongoing difficulties in the sector. The decline was driven by the lowest new orders since December and the fastest drop in foreign demand this year.

Meanwhile, inflation in the euro zone fell to a three-year low of 2.2%, bolstering expectations for further policy easing from the European Central Bank. Germany and France, key euro zone economies, saw worsening manufacturing conditions. In contrast, the UK experienced its strongest manufacturing growth in over two years, driven by domestic demand, while Asian manufacturers showed mixed results. China's manufacturing PMI rose to 50.4, signaling slight growth, though other regional economies like Malaysia and Indonesia saw contractions.