Eurozone business activity gained modest ground in September, with the composite PMI edging up to 51.2, its strongest in 16 months. Growth was powered by the services sector, which hit a nine-month high of 51.4, while manufacturing slipped back into contraction at 49.5. Germany provided much of the momentum, recording its best performance since May 2023, but France dragged the bloc down with its thirteenth straight month of decline.

Despite stronger output, demand looked fragile. New orders stalled after a brief recovery in August, held back by another fall in exports, the steepest in six months. Firms continued to run down backlogs, a trend persisting for over two years, while employment stabilised after six months of job creation. Services hiring was marginal, offset by continued factory job losses, with Germany seeing the sharpest reduction in 2025.

Price pressures eased, with input and output inflation softening, though Germany still saw charges rise at a five-month high. Meanwhile, supply chains weakened again, as delivery times lengthened for a fourth month. Confidence remained positive but fell to a four-month low, reflecting manufacturing gloom and wider economic uncertainty. This latest update takes the RPI and RPI-P to minus 8, meaning that economic activities are now within the expectations of the eurozone area.

The consensus looks for the PMI composite almost unchanged at 50.9 for September versus 51.0 in the August final. Manufacturing expected flat at 50.7 for September versus 50.7 in the August final. Services seen at 50.5 in September versus 50.5 in in the August final.

The flash Composite Purchasing Managers' Index (PMI) provides an early estimate of current private sector business activity by combining information obtained from surveys of the manufacturing and service sectors of the economy. The flash data are released around ten days ahead of the final report and are typically based upon around 75-85 percent of the full survey sample. Results covering a range of variables including manufacturing output, employment, new orders, backlogs and prices are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) activity versus the previous month and the closer to 100 (zero) the faster is activity growing (contracting). The report also contains flash estimates of the manufacturing and services PMIs. The survey, produced by S&P Global uses a representative sample of around 5,000 manufacturing and services companies, the former including Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece and the latter Germany, France, Italy, Spain and the Republic of Ireland.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.