Published by Global Banking & Finance Review®
Posted on November 3, 2025
2 min readLast updated: January 21, 2026
Add as preferred source on GoogleEuro zone manufacturing stagnated in October as new orders flatlined. PMI registered 50.0, indicating no growth, with Greece and Spain showing improvements.
LONDON (Reuters) -Euro zone manufacturing activity stagnated in October as new orders flatlined and headcount fell, despite production continuing to edge higher for an eighth consecutive month, a survey showed on Monday.
The final HCOB Eurozone Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, registered 50.0 in October, matching a preliminary estimate and up slightly from September's 49.8 but sitting exactly at the threshold separating growth from contraction.
"In the euro zone's manufacturing sector, we can at best speak of a very delicate sprout of economic recovery," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.
Output expanded marginally for the eighth straight month but showed little momentum, registering at 51.0 compared with 50.9 in September. New orders remained subdued, neither growing nor declining after over three years of near-continuous contraction.
Export orders declined for a fourth consecutive month, acting as a drag on overall demand for European goods.
The reduction in headcount accelerated slightly, extending the manufacturing sector's employment contraction to nearly two-and-a-half years. Companies reduced staffing levels despite delivery times from suppliers lengthening to the greatest extent in three years.
"Job cuts continued and even picked up a bit. This is the result of weak demand, which is forcing companies to cut costs or boost productivity," de la Rubia added.
Performance varied significantly across the region. Greece and Spain recorded the strongest improvements, with respective PMI readings of 53.5 and 52.1. In contrast, Germany and France - the bloc's largest economies - remained in contraction territory at 49.6 and 48.8 respectively.
Manufacturers continued reducing inventory levels in October, extending a prolonged period of destocking for both raw materials and finished goods.
Input costs were unchanged from September while prices charged to customers increased only marginally for the first time since April.
Enjoying a rare period of low inflation, the European Central Bank left interest rates on hold last week for the third meeting in a row and offered no hints about future moves.
Business confidence about the year ahead declined for the second consecutive month, falling below the long-term average amid persistent weak demand and economic uncertainty.
(Reporting by Jonathan Cable; Editing by Toby Chopra)
The Purchasing Managers' Index (PMI) is an economic indicator that measures the activity level of purchasing managers in the manufacturing sector. A PMI above 50 indicates expansion, while below 50 indicates contraction.
New orders refer to the total number of new purchase orders received by manufacturers during a specific period. It is a key indicator of future production and economic activity.
Employment contraction occurs when businesses reduce their workforce, often due to decreased demand for products or services. This can lead to higher unemployment rates.
Export orders are purchase orders for goods that are to be shipped to foreign markets. A decline in export orders can indicate weakening international demand for a country's products.
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