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EMU: PMI Composite Flash
| Consensus | Consensus Range | Actual | Previous | |
| Composite Index | 51.8 | 51.1 to 52.3 | 51.5 | 51.9 |
| Manufacturing Index | 49.3 | 48.4 to 49.7 | 49.4 | 49.2 |
| Services Index | 52.5 | 52.1 to 52.9 | 51.9 | 52.6 |
Highlights
Eurozone business activity maintained modest growth in January 2026, with the composite PMI holding steady at 51.5, extending the region's expansion streak to thirteen consecutive months. Output continued to rise on the back of increasing new orders, while business confidence strengthened markedly, reaching a 20-month high and signalling improved expectations for the year ahead.
Sectoral performance remained uneven. Manufacturing output returned to growth after a brief contraction, although the pace was marginal. Services activity continued to expand but slowed to a four-month low, limiting overall momentum. Regional divergence persisted, as renewed weakness in France offset stronger growth in Germany, where activity rose at its fastest rate since October.
Despite ongoing output growth, labour market conditions weakened. Employment declined for the first time in four months, driven largely by pronounced job losses in Germany, marking the sharpest fall outside the pandemic period since 2009. Firms were nonetheless able to reduce backlogs, reflecting easing demand pressures.
Inflation signals intensified at the start of the year. Input costs rose at the fastest pace in nearly twelve months, led by manufacturing, while selling price inflation reached its highest level since April 2024, concentrated mainly in services. Overall, the outlook remains cautiously positive, though constrained by soft demand and persistent cost pressures.
Market Consensus Before Announcement
Business activity seen improving marginally with the composite up to 51.8, manufacturing up to 49.3 and services at 52.5, up from 51.5, 48.8 and 52.4, respectively.
Definition
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.
Description
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.