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EMU: PMI Composite Final
| Consensus | Consensus Range | Actual | Previous | |
| Composite Index | 49.5 | 49.5 to 49.5 | 50.0 | 48.5 |
| Services Index | 48.9 | 48.9 to 48.9 | 49.4 | 47.7 |
Highlights
The euro area economy showed encouraging signs of stabilisation in June 2026, with the composite PMI rising to 50.0 from 48.5, signalling an end to two consecutive months of contraction. The improvement was largely driven by stronger manufacturing output, which offset the continued, albeit slower, decline in the services sector. Although business activity has yet to return to sustained expansion, the data suggest that the pace of economic deterioration has eased significantly.
Despite ongoing weakness in demand, reflected in a fourth consecutive decline in new orders and softer export sales, firms maintained broadly stable employment levels, indicating increased confidence in the durability of the recovery. Stronger performances in Italy, Spain and Ireland also helped offset continued, though moderating, contractions in Germany and France.
A particularly positive development was the easing of inflationary pressures. Input cost inflation slowed to its weakest pace since February, allowing businesses to moderate increases in output prices. Combined with business confidence reaching a four-month high and employment stabilising, these trends point to improving economic fundamentals.
Overall, the June PMI data suggest that the euro area is transitioning from contraction to stabilisation. However, the persistence of weak demand, declining order books and subdued services activity indicates that a sustained recovery will depend on stronger domestic consumption, improving external demand and continued moderation in inflationary pressures. These updates take the RPI to 34 and the RPI-P to 56, meaning economic activities continue to outpace market expectations in Germany.
Market Consensus Before Announcement
The consensus looks for no revision in the final from the flash at 49.5 for composite and 48.9 for services.
Definition
The Composite Purchasing Managers' Index (PMI) provides an estimate of private sector output for the preceding month by combining information obtained from surveys of the manufacturing and service sectors of the economy. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster is output growing (contracting). The report also contains the final estimate of the services PMI. The data are provided by S&P Global using 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.