Euro zone businesses saw new orders increase in August for the first time since May 2024, helping overall activity expand at the fastest pace in 15 months despite persistent weakness in exports, a closely watched survey showed.

The HCOB Flash Eurozone Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 51.1 in August from 50.9 in July. This marks the third straight month of improvement and the highest reading since May 2024. A Reuters poll had expected a dip to 50.7, making the result a positive surprise.

PMI readings above 50 signal growth, while readings below that level point to contraction. Analysts say this uptick suggests the euro zone economy is holding up well despite global uncertainty.

“The small increase in the composite PMI indicates that the euro zone economy continues to weather global storms quite well,” said Bert Colijn of ING. “Improvements in new orders and increased hiring add to a picture of accelerating growth, but a muted pace seems likely given significant downside risks to the outlook.”

Manufacturing was a bright spot. The sector expanded for the first time in more than three years, with its headline PMI rising to 50.5 from 49.8 in July. Output grew at the fastest rate in nearly three and a half years. Services activity also grew, though at a slightly slower pace, with the PMI slipping to 50.7 from 51.0.

Germany — the bloc’s largest economy — posted its fastest growth since March, driven by strong manufacturing. France saw its downturn ease significantly, while the rest of the euro zone continued to grow at a softer pace.

Hiring also picked up. Euro zone firms added jobs for the sixth month in a row, with the fastest rate of employment growth since June 2024. Gains were concentrated in services, while manufacturing continued to shed jobs.

Inflation pressures, however, remain a concern. Input costs rose at the sharpest rate in five months, while service-sector cost inflation hit its highest level since March. Output prices also rose at their fastest pace in four months, a trend that could weigh on the European Central Bank’s (ECB) plans.

“The ECB might wince a little at the rising cost pressures in the services sector,” said Cyrus de la Rubia at Hamburg Commercial Bank. “That said, there’s a bit of relief in the fact that inflation in service-sector selling prices has remained more or less steady.”

ECB policymakers are expected to hold off on further rate cuts until at least December, though there is no clear consensus on where the deposit rate will end the year. In the meantime, investors are watching the U.S. Federal Reserve’s Jackson Hole symposium this week for clues about global monetary policy direction.