S&P Global Market Intelligence chief business economist Chris Williamson said
euro-area PMI shows manufacturing is in its strongest growth phase in more than
four years, with sustained expansion since February. The sector has proved
resilient despite earlier cost and supply shocks from tariffs and conflicts in
the Middle East and Ukraine. Rising defence spending, precautionary inventory
rebuilding, supply-chain diversification and trade-flow shifts from US tariffs
have created growth opportunities for many manufacturers. The recovery is
uneven: French and Italian manufacturers remain weak, with French industry also
hit by rising domestic political uncertainty. Input-cost inflation for purchased
materials jumped in October to one of the highest levels in four years, driven
by energy prices and supply bottlenecks. The PMI print increases pressure on the
ECB to continue raising rates in coming months, adding new headwinds for
companies.
