Eurozone PMI Marks Strongest Growth in Over a Year

The Eurozone private sector expanded at its fastest pace in more than a year in August 2025, according to the latest survey data. The HCOB Eurozone Composite Purchasing Managers’ Index (PMI) rose to 51.1, up from 50.9 in July and surpassing expectations for a slowdown to 50.7. The result points to resilience in the region’s economy despite ongoing global uncertainties.

Services and Manufacturing Drive Expansion

Growth was fueled by:

• Services: The sector recorded a third consecutive month of expansion, extending its steady recovery.
• Manufacturing: The index showed an unexpected rebound, marking the first increase in output in more than three years.

For the first time in 14 months, new orders rose at the aggregate level, helping firms expand capacity and prompting stronger hiring. Employment rose for the sixth month in a row, reflecting improving demand conditions.

Pricing Pressures Intensify

Input cost inflation accelerated to its highest level in five months, prompting the strongest increase in output charges in four months. Rising costs in both services and manufacturing are adding to inflationary pressures within the bloc.

Sentiment Softens

Despite the stronger PMI figures, business confidence eased for the second straight month. Companies cited potential U.S. tariffs and broader economic headwinds as key risks. The data suggest that while activity is rebounding, sentiment remains fragile and vulnerable to external shocks.