Euro Area Manufacturing Expansion Gathers Pace

The S&P Global Eurozone Manufacturing PMI rose to 52.9 in September 2026, the most since May 2022 and above preliminary estimates of 52.7. Demand improved notably, with new orders increasing at their fastest pace since March 2022, while export sales expanded for a second consecutive month, marking the first sustained rise in overseas orders in more than four and a half years. Rising demand also put pressure on factory capacity, with backlogs increasing for the first time since April and at the fastest pace in almost four and a half years. Employment edged higher, reversing a prolonged period of job losses, while manufacturers increased purchases of raw materials and intermediate goods at one of their fastest rates since May 2022. Supply delays persisted but eased to their least severe since February. Meanwhile, business confidence reached a seven-month high, although input and output price pressures accelerated.

The S&P Global Eurozone Manufacturing PMI remained unchanged at 52.7 in September 2026, slightly exceeding the market expectation of 52.6, according to flash data. Manufacturing output also remained strong, with the Output Index rising to 53.4 from 53.3, its highest level in 55 months. Growth was supported by a renewed increase in new export orders, while employment was broadly unchanged. Firms also increased purchasing activity for a second consecutive month, although the pace remained modest. The rise in input buying helped companies maintain pre-production inventories broadly unchanged, ending a decline that had persisted since February 2023, while stocks of finished goods were also stable. Supplier delivery times lengthened again, although the deterioration was the least severe since February. Meanwhile, input cost inflation accelerated and output prices rose at a faster pace. Business confidence weakened, with manufacturers expressing less optimism about the year ahead.

The S&P Global Eurozone Manufacturing PMI rose to 52.7 in August 2026 from 51.9 in July, slightly below the preliminary estimate of 52.8 but still marking the strongest reading since May 2022. Germany was a key driver, recording its strongest manufacturing expansion in more than four years, while France also contributed positively. This was partly offset by a contraction in Italy and Spain. Eurozone manufacturing output increased for a third consecutive month, with growth accelerating to its fastest pace in four and a half years. Demand also improved, supported by the strongest increase in total new orders since early 2022 and a renewed rise in export business. Supply disruptions persisted, however, as delivery times lengthened sharply. Employment was broadly stable, ending more than three years of declines. Meanwhile, input cost pressures continued to ease, while business confidence strengthened for a fourth straight month.