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EMU: PMI Composite Flash
| Consensus | Consensus Range | Actual | Previous | |
| Composite Index | 50.1 | 49.5 to 50.3 | 51.9 | 49.5 |
| Manufacturing Index | 51.5 | 51.0 to 51.7 | 52.0 | 51.3 |
| Services Index | 49.8 | 49.4 to 50.0 | 51.6 | 48.9 |
Highlights
The eurozone economy regained momentum in July 2026, with the composite PMI rising from 50.0 to a five-month high of 51.9, signalling its first expansion in four months. Growth became more broadly based as services returned to expansion and manufacturing output reached a 52-month high of 53.0.
A renewed increase in new orders, the strongest since April 2023, suggests that the recovery is gaining demand-side support. However, export orders continued to decline, indicating that expansion remains principally dependent on domestic and intra-regional demand. The geographical pattern was also uneven as Germany returned to growth, France remained marginally contractionary, while the rest of the eurozone recorded stronger expansion.
Employment increased for the first time in 2026, although job creation was modest and concentrated outside Germany and France. Meanwhile, easing supply-chain disruption enabled manufacturers to increase input inventories for the first time in 41 months, signalling improved operational confidence.
Inflationary pressures moderated but remained elevated, creating a delicate policy balance for the European Central Bank. In summary, the eurozone has moved from stagnation towards cautious expansion, but weak exports, uneven employment gains and geopolitical uncertainty continue to limit the recovery’s strength and resilience. These latest updates take the RPI to 1 and the RPI-P to minus 2, meaning that economic activities are now within the expectations of the euro area economy.
Market Consensus Before Announcement
The composite flash is expected almost flat at 50.1 in July from 50.0 in the June final.
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.