Private sector growth slowed in the eurozone in October 2026, with output and new orders increasing at a slower rate, according to the latest S&P Global Flash Eurozone PMI.
As the data showed, the Flash Eurozone Composite PMI Output Index fell to 51.9 in October from 53.1 in September, marking a four-month low, with the pace of growth down on the previous month.
“The eurozone economy starts the fourth quarter with businesses reporting further robust growth, the flash PMI being consistent with GDP growing at a 0.3% quarterly cadence,” commented Chris Williamson, chief business economist at S&P Global Market Intelligence.
“While that’s below the pace enjoyed in September, it is still among some of the best performances seen over the past three years.”
Manufacturing and services
Both manufacturing and services contributed to the October slowdown. The Services PMI Business Activity Index declined to 51.7 from 53.0, a two-month low, while the Manufacturing Output Index fell to 52.4 from 53.6. The Manufacturing PMI declined to 52.4 from 52.9.
Elsewhere, new orders increased for the fourth consecutive month but at the slowest rate in that period. New export orders also increased for a third successive month, although the rate of growth eased.
Employment was ‘broadly unchanged’ in October, S&P Global noted, following small increases in each of the previous two months.
In services, employment growth slowed to a five-month low, while manufacturing employment declined after two months of increases.
Inflationary pressures
Inflationary pressures also increased, the data showed. Manufacturing input prices rose at their fastest rate since May, with companies citing higher energy, fuel and transport costs. Overall input cost inflation increased for a second consecutive month, although the rate of services input price inflation slowed.
Finally, the data showed that business confidence fell to a five-month low in October, with the decline particularly pronounced among manufacturers.eur
“Key to the broader slowdown is the further escalation of inflationary pressures seen during the month,” said Williamson. “Input costs are rising sharply again, the rate of increase surging in manufacturing on the back of higher energy prices, causing firms to push selling prices higher in order to protect margins.
“Higher interest rates are also starting to take a toll, dampening demand, and the picture of sustained growth and stubbornly elevated inflation from the October flash PMI will likely add to further speculation of more aggressive policy tightening from the ECB.” Read more here.
