Eurozone PMI hits 51-month high while Italy and Spain fall into contraction

The eurozone Manufacturing PMI increased by 0.8 points to 52.7, reaching a 51-month high. The Manufacturing Output Index rose from 52.9 to 53.3, its highest level for four and a half years.

New factory orders recorded their strongest increase since early 2022. Export business also grew, but only for the second time in four and a half years, with particularly strong increases reported in Austria, Germany and the Netherlands.

Manufacturers increased purchasing after reductions in June and July. However, stocks of purchased materials continued to fall and did so more quickly than in the previous month. This combination suggests that stronger production was absorbing inputs even as firms resumed buying.

Intermediate-goods manufacturers – including producers of chemicals, metals, electrical equipment and electronic components – made the largest contribution to eurozone output growth.

Supplier delivery times lengthened sharply and slightly more than in July. Despite the stronger production figures, backlogs were unchanged and employment was broadly stable, ending a sequence of more than three years of continuous job losses without yet producing clear employment growth.

August manufacturing PMI results

A reading above 50 indicates an improvement from the previous month, while a figure below 50 signals deterioration.

Market	Aug 2026	Jul 2026	Change	Direction
Germany	54.3	52.2	+2.1	Expansion accelerated
Netherlands	53.8	54.4	-0.6	Expansion slowed
Eurozone	52.7	51.9	+0.8	Expansion accelerated
United Kingdom	51.7	51.9	-0.2	Expansion slowed
France	51.1	49.8	+1.3	Returned to expansion
Romania	51.1	50.1	+1.0	Expansion accelerated
Italy	49.6	51.3	-1.7	Returned to contraction
Spain	49.5	50.2	-0.7	Returned to contraction
Poland	48.3	49.0	-0.7	Contraction deepened

Source: S&P Global, Nevi and BCR.

Germany leads the rebound, but stockpiling plays a part

Germany recorded the strongest monthly improvement, with its PMI climbing from 52.2 to 54.3. New orders rose at their quickest rate since February 2022, supported by similarly strong export growth, while production increased at its fastest pace since January 2022.

Manufacturers attributed the improvement to stronger defence spending, data-centre construction and precautionary stockpiling. Intermediate-goods producers recorded a particularly sharp increase in orders.

Purchasing activity rose at its fastest rate since May 2022 as companies responded to stronger demand and attempted to secure materials. Pre-production inventories came close to stabilising after more than three and a half years of decline, while backlogs increased solidly.

The recovery has therefore started to generate more industrial freight activity, but it is not entirely demand-led. Some of the increase reflects companies ordering earlier or buying more material because they are concerned about future availability.

Supply delays intensified to their worst level for three months. Respondents cited shortages of electronic components, stronger demand across supply chains and logistics disruption aggravated by low water levels on the Rhine.

Factory employment continued to fall, although the reduction was the weakest since September 2023.

Dutch exports rise at fastest rate for over four years

The Netherlands remained the second-strongest market in the comparison. Its PMI eased from 54.4 to 53.8, a five-month low, but continued to signal solid growth.

Production and new orders increased strongly, albeit more slowly than in July. Export sales rose at their fastest rate for more than four years. Capital-goods manufacturers recorded particularly strong export growth, while consumer-goods producers led the overall increases in output and orders.

Manufacturers increased purchasing and built safety stocks in response to supply disruption. Pre-production inventories rose at their fastest rate for almost four years, while backlogs increased for a fourth consecutive month.

Supplier lead times lengthened noticeably, with shortages and longer waits for electronic products among the problems reported. The Middle East conflict and disruption to international shipping continued to affect the availability and cost of oil products, chemicals and other materials.

Dutch manufacturers also reported higher spending on energy, raw materials and transport. Some specifically cited changes to HGV tolls as an additional cost pressure.

UK growth slows, but exports and employment remain positive

UK manufacturing remained in expansion, although the PMI slipped from 51.9 to a five-month low of 51.7. The index has now stayed above 50 for ten consecutive months.

Production rose for a fifth month, but at its slowest rate since April. New-order growth also weakened despite improvements in both domestic and overseas demand.

Export orders increased for an eighth consecutive month, supported by demand from mainland China, the United States, the Middle East and western Europe. Investment-goods manufacturers performed particularly strongly, with output growth reaching a two-year high and new-order growth its fastest for more than four years.

The expansion was not evenly distributed. Small manufacturers reported declines in production and orders, while medium-sized and large companies continued to grow. Consumer-goods production fell for the first time in three months, and intermediate-goods order books also weakened.

Employment provided a stronger signal, rising at its fastest pace for two years. Supplier delays, meanwhile, were the least pronounced for six months, and purchase-price inflation eased to its lowest level since February.

Romania strengthens, although confidence hits a record low

Romania’s PMI rose from 50.1 to 51.1, its highest level since May 2024. Production increased for a second month, while new orders recorded one of their strongest increases since the survey began in July 2023.

Export orders returned to growth for the first time in four months. Purchasing also increased after ten months of decline, recording the fastest rise in the survey’s short history.

Manufacturers added jobs for the first time in more than two years, while backlogs increased for a third month. Supplier delivery times were unchanged, signalling the first stabilisation in supply performance for 17 months.

The improvement nevertheless comes from a low base. Official figures cited in the release showed Romanian manufacturing production falling by 4.6% year on year during the first half of 2026. The August rebound is therefore unlikely to offset all the weakness recorded earlier in the year.

Manufacturers also remained cautious about the future. Although expectations were still positive overall, confidence fell to the lowest level recorded by the survey.

France moves above 50 without a convincing demand recovery

France’s PMI increased from 49.8 to 51.1, returning above the 50-point threshold. However, the underlying figures provide limited evidence of a sustained recovery.

Production increased for the first time since April, but only marginally and entirely because of growth among intermediate-goods manufacturers. Consumer- and investment-goods output declined.

New orders fell for a fourth consecutive month, while export demand maintained its year-to-date decline. Purchasing was cut at its fastest rate since June 2025, and input inventories recorded their steepest reduction in nine months.

Finished-goods stocks also fell as companies attempted to release cash, while backlogs declined at their fastest pace for a year and a half. Manufacturers became pessimistic about the 12-month production outlook for the first time in ten months.

Supplier delivery times lengthened more sharply. Because longer delivery times make a positive contribution to the headline PMI calculation, supply disruption may have helped push the index above 50 despite continued weakness in demand and purchasing.

Italy and Spain return to contraction

Italy’s PMI fell from 51.3 to 49.6, its first reading below 50 since January. The 1.7-point decline was the largest monthly deterioration among the markets examined.

New orders recorded their steepest fall for almost a year and a half, driven primarily by domestic weakness. Export orders also declined, but only marginally. Production fell for the first time in seven months, while purchasing was cut at its fastest rate for almost a year.

Material shortages and transport-route problems continued to lengthen supplier lead times. Manufacturers reported higher prices for energy, freight and transport, although overall input-cost inflation eased as demand for materials weakened.

Spain’s PMI dropped from 50.2 to 49.5, its lowest level since March. Production declined at its fastest rate since the end of 2023, even after adjustment for normal summer shutdowns.

Domestic and international orders both fell, with capital-goods producers reporting particular difficulty securing investment and commitments to new contracts. Purchasing declined for a ninth consecutive month and at its fastest rate since April 2025.

Spanish factories increasingly relied on materials and finished products already held in warehouses. Input stocks fell for an eleventh month, while finished-goods inventories recorded their steepest decline since April.

At the same time, manufacturers faced sharply higher energy and transport costs. Disruption to shipping routes and difficulties sourcing materials continued to lengthen delivery times, leaving companies with the combination of weaker volumes and higher operating costs.

Poland remains the weakest market

Poland’s PMI fell from 49.0 to 48.3, extending the deterioration in manufacturing conditions to a 16th consecutive month.

New orders declined for a 17th month and at a faster rate, with manufacturers citing weak construction demand and competition from Chinese imports. Export orders fell for a ninth consecutive month.

Production has now declined in 14 of the past 16 months. Backlogs fell for a seventh month, while stocks of finished goods increased. This indicates that existing production remained too high for the current level of sales.

Manufacturers reduced purchasing again, yet supplier delivery times lengthened by the greatest amount since June 2022. Production delays and transport problems were cited despite weaker demand for inputs, pointing to disruption rather than capacity pressure.

Input-cost inflation accelerated for the first time in four months, partly because of higher fuel and transport costs. Selling-price inflation slowed, increasing the pressure on manufacturers’ margins.

Freight recovery remains geographically concentrated

August provided the clearest evidence so far this year of stronger industrial activity in parts of Europe. Germany and the Netherlands combined rising production with stronger orders, exports, purchasing and backlogs, while Romania showed an emerging improvement from a much weaker base.

The recovery was not broad-based, however. The UK continued to expand but lost momentum, while France’s return above 50 was undermined by falling orders and aggressive destocking. Italy and Spain moved back into contraction, and Poland remained caught in a prolonged downturn.

The inventory data reveal an equally important split for freight markets. German and Dutch manufacturers increased purchasing and sought to secure supplies, supporting inbound transport demand. Factories in Italy, Spain, France and Poland instead reduced buying or relied more heavily on existing stocks.

Supplier disruption cut across both groups. Low Rhine levels affected German industry, Middle East shipping disruption remained visible in the Netherlands, Italy and Spain, and Polish manufacturers reported their worst delivery delays in more than four years. August’s industrial improvement therefore came with a renewed warning: freight demand may be recovering in parts of Europe, but the supply chains serving it remain costly, disrupted and highly uneven.