Eurozone Business Activity Growth Slows

The S&P Global Eurozone Composite PMI fell to 51.9 in October 2026, down from September’s three-and-a-half-year high of 53.1 and below market expectations of 52.7, according to the preliminary estimate. Although business activity expanded for a fourth consecutive month, growth slowed to its weakest pace in the sequence, partly driven by a renewed contraction in French services activity. While strikes and unrest may have disrupted local economic activity in France, growth also eased across the rest of the eurozone, affecting both manufacturing and services. Meanwhile, new order growth weakened, bringing hiring close to stagnation, while rising energy prices drove input costs higher and prompted firms to increase selling prices. Higher interest rates also dampened demand, reinforcing concerns over slowing growth and persistent inflation that could fuel expectations of further ECB tightening. Finally, business confidence fell to a five-month low.

The S&P Global Eurozone Composite PMI rose to 53.1 in September 2026 from 52 in August, matching the flash estimate and reaching its highest level in nearly three and a half years. The latest reading pointed to a solid acceleration in private-sector activity, with both manufacturing and services recording stronger growth as the third quarter ended. Demand also improved, with new orders rising at the fastest pace in 41 months and foreign orders increasing at their strongest rate in more than four and a half years. Capacity constraints became more apparent, as backlogs increased for the first time since June 2022, prompting companies to expand their workforces again. Business confidence remained positive but relatively subdued. Meanwhile, inflationary pressures intensified, with input costs and selling prices rising at their fastest rates since May.

The S&P Global Eurozone Composite PMI rose to 53.1 in September 2026, up from 52.0 in August and above market expectations of 51.7, according to a preliminary estimate. The latest reading marked a third consecutive month of expansion in business activity, with growth accelerating to its fastest pace in almost three-and-a-half years. Growth strengthened across both manufacturing and services, reaching 55- and 10-month highs, respectively. Germany expanded for a third straight month at its fastest pace in just under a year, while France returned to growth for the first time in 10 months. New orders rose at their fastest pace since May 2022, driving the first increase in backlogs since June 2022. Employment also increased, although the pace of job creation remained modest. Meanwhile, inflationary pressures intensified, with input costs and output prices rising at their fastest rates in four months. Business confidence weakened again and remained relatively subdued.