October PMI surveys reflect divergencies across Euro Area member states

Euro Area : October survey confirms an improvement in the outlook, with the composite index reaching 52.2 in October, up from 51.2 in September. New orders have driven the composite index higher, as well as employment. By sector, the services component has increased significantly (+1.3 points) to 52.6. New orders rose by 1.5 points, which in turn boosted employment expectations by 1.7 points. These positive results occur despite the underperformance recorded in France. In the manufacturing sector, the PMI index has only slightly increased by 0.2 points. This change has been driven by a slight rise in order books and an improvement in ongoing production. Germany : The composite PMI index rose by 1.8 points in October, above consensus expectations. N ew orders and ongoing production increased by over 3 points . T he manufacturing secto r registered a marginal rise from 49.5 to 49.6 . T he improvement in order books (+0.8 points to 50.2), along with the increase in ongoing production, signals that the sector continues to recover. However, it is primarily the services index that rose from 51.5 to 54.5 (+3 points), notably with a significant bounce in new orders (+4.1 points to 54.5). This rebound has lifted the employment component, from 47.7 to 51.7. T oday’s survey reinforce s our scenario of a gradual recovery in economic activity in Germany starting from late 2025 and into early 2026 France : PMIs fell short of expectations in October, declining for the second consecutive month to 46.8, marking an eight-month low, down from 48.1. This drop was largely driven by a significant downturn in the services sector, which slipped to 47.1 from 48.5. The index's composition reflects underlying weaknesses, with political uncertainties negatively impacting activity levels constrained by weak client demand and lackluster domestic economic conditions. Panel members attributed the decrease in consumer spending to these domestic political uncertainties. Meanwhile, the manufacturing PMI remained relatively stable at 48.3; however, manufacturers anticipate a decrease in their production levels.