Published by Global Banking & Finance Review®
Posted on November 21, 2025
3 min readLast updated: January 20, 2026
Add as preferred source on GoogleEuro zone business activity grew steadily in November, driven by services expansion, while manufacturing contracted due to weak demand, according to PMI data.
By Indradip Ghosh
(Reuters) -Euro zone business activity grew steadily this month as services expanded at the quickest pace in 1-1/2 years, while weak demand sent manufacturing back into contraction territory, a private survey showed.
The 20-nation bloc has shown economic resilience despite high global uncertainty since the start of the year, and improving business confidence suggests the momentum is likely to remain intact.
The HCOB Flash Eurozone Composite PMI, compiled by S&P Global, declined slightly to 52.4 in November from a more-than two-year high of 52.5 in October, just shy of a Reuters poll forecast for 52.5 but marking its 11th consecutive month above the 50.0 mark that separates growth from contraction.
"Business sentiment has undoubtedly turned more optimistic over the course of the year, which has translated into sluggish economic growth so far. At the same time, global headwinds have not pushed the bloc into recession," said Bert Colijn at ING.
"While we expect activity to strengthen further in 2026, we remain cautious about translating improved sentiment into immediate, faster growth."
The services PMI rose to 53.1 from 53.0 in October, its highest since May 2024 and better than 52.8 predicted in the Reuters poll.
But manufacturing activity contracted after remaining at the break-even point the previous month. The sector's headline PMI declined to 49.7 this month from 50.0 in October, its lowest since June and below the Reuters poll prediction of 50.2. Weak demand led factories to cut jobs at their fastest rate in seven months.
In Germany, the bloc's largest economy, private sector growth lost momentum in November on an unexpected contraction in the manufacturing sector and lower-than-expected growth in the service sector.
But in France, business activity almost stabilised as growth in services nearly offset a sharper-than-anticipated shrinkage in manufacturing output.
In Britain, outside the European Union, business growth ground almost to a halt this month, as companies put their plans on hold before next week's government budget.
Meanwhile, overall input costs rose at their quickest rate since March, but firms largely absorbed them. Output prices increased at their weakest pace in over a year.
Overall inflation in the shared-currency bloc has remained persistently around the European Central Bank's 2% target. That, along with a steady economic outlook, is widely expected to keep key interest rates on hold for a long period.
(Reporting by Indradip Ghosh; Editing by Hugh Lawson and Alison Williams)
PMI stands for Purchasing Managers' Index, a measure of the prevailing direction of economic trends in manufacturing and service sectors. It is based on surveys of private sector companies.
Economic growth refers to the increase in the production of goods and services in an economy over a specific period, usually measured as the percentage increase in real GDP.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. Central banks attempt to limit inflation to keep the economy running smoothly.
The composite PMI is an index that combines both manufacturing and services PMIs to provide an overall view of economic activity in the private sector.
Manufacturing contraction occurs when the manufacturing sector experiences a decline in production levels, often indicated by a PMI below 50, signaling a reduction in economic activity.
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