Eurozone Business Activity Growth Weakest in 10 Months

The S&P Global Eurozone Composite PMI declined to 50.5 in March 2026, down from 51.9 in February and below market expectations of 51.0, according to preliminary data. This signals only marginal growth in the bloc’s private sector, the weakest in ten months, as service sector activity nearly stalled. New orders contracted for the first time in eight months, and employment continued to fall amid rising uncertainty tied to the Middle East conflict. On the price front, input cost inflation surged to its fastest pace since February 2023, while output prices rose at the sharpest rate since February 2024. Supply chains also faced severe disruptions, with suppliers’ delivery times lengthening the most in over three-and-a-half years. Finally, business confidence plummeted to its lowest in nearly a year, marking the steepest drop since Russia’s invasion of Ukraine in 2022.

The HCOB Eurozone Composite PMI climbed to 51.9 in February 2026, up from 51.3 in January, marking the strongest expansion in private sector activity in three months. The reading signaled a firmer pace of growth across the euro area economy. Growth was driven by stronger manufacturing and services output, with Germany leading the upturn. Ireland and Italy also posted solid gains, while growth slowed in Spain and France stagnated. New orders increased at a faster pace overall, despite a continued decline in export business. Employment levels were broadly stable, showing little change from the previous month. On the price front, input cost inflation accelerated for the fourth consecutive month, reaching its highest level in nearly three years. Output price inflation eased slightly but remained elevated, marking the second-steepest increase in the past year. Meanwhile, business confidence improved, rising to its strongest level since May 2024.

The HCOB Eurozone Composite PMI rose to 51.9 in February 2026 from 51.3, beating expectations of 51.5, according to a preliminary estimate. The data signaled the strongest expansion in private sector activity since November, driven by the sharpest rise in manufacturing output since August 2025 and faster growth in services. Meanwhile, new orders increased only marginally, as foreign demand continued to decline. Employment slipped slightly for a second straight month, and backlogs of work extended their downturn. On the pricing front, input cost inflation accelerated to its joint-fastest pace in 34 months, while output price growth eased modestly. Business confidence edged lower but remained the second-highest level in 21 months.