Manufacturing production accelerated to a 54-month high (53.4), lifting the headline Manufacturing PMI to 52.8 (51-month high). Growth was primarily driven by German output—boosted by AI-related tech goods and defense equipment demand.
The Services PMI held steady at 51.7, aided by robust tourism spending across the broader euro area. Total new business rose to a 40-month high, supported by the first expansion in new export orders in 4.5 years.
Eurozone employment expanded for the first time in 2026 as manufacturing ended a 38-month streak of job shedding. Input buying ticked up due to precautionary stock-building, though Middle East disruptions caused extensive supplier delays and depleted finished goods inventories.
Input cost inflation slowed to a 6-month low, and output price inflation eased to its weakest pace since March (led by German moderation). However, historically elevated price levels and returning job growth maintain a hawkish stance, leaving potential interest rate hikes on the table.
Overall 12-month business optimism slipped to a three-month low, though manufacturing confidence rose to a six-month high, with German business sentiment notably outperforming France and the wider eurozone.