Europe’s purchasing managers are upbeat, though rising costs keep EU industry stalled

By Ahmet Kaya

Is the European economy finally turning a corner? Purchasing managers appear to be the most upbeat they have been all year. But industrial output figures are not following suit.

Survey figures from @S&P Global put EU manufacturing and services #PMI at 2026 highs. The Euro Area composite index signaled the fastest output growth in almost three and a half years.

However, EU manufacturing output fell 0.2% m/m in August, its third decline in a row. Costs are the most probable explanation: energy accounts for most of the increase in euro-area inflation, and manufacturers appear to be absorbing it.

PMIs count how many firms report growth, not how much growth is taking place. With prices rising quickly, some respondents may be reporting higher sales values while volumes stay flat.

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