Although the euro area services sector remains resilient, there is no room for complacency: the longer the weakness in manufacturing persists, the greater the risk of adverse spillovers to other sectors of the economy. In Germany, for example, service providers reported in August noticeably less optimistic expectations for the near future, and have become more pessimistic in their assessment of the current business situation.
Possible knock-on effects from anaemic industrial activity to other sectors of the economy therefore need to be closely monitored. As a result of continued global uncertainties and their impact on confidence, the short-term growth outlook has been revised down in the latest ECB staff macroeconomic projections.