Key takeaways
- Eurozone manufacturing strengthened in July, with the PMI rising from 51.4 to 51.9 as factory output increased at its fastest pace for almost four-and-a-half years.
- Germany delivered the clearest industrial recovery, combining stronger production with rising new and export orders—a positive signal for cross-border freight.
- Underlying demand remained fragile. Eurozone order books continued to shrink, suggesting that production was partly supported by manufacturers completing existing work.
- The recovery remained uneven: the UK and Italy stayed in expansion, Spain was close to stagnation, Poland remained below 50.0 and France returned to contraction.
The final S&P Global Eurozone Manufacturing PMI rose from 51.4 in June to 51.9 in July, its highest level for three months. Germany recorded the strongest improvement among the largest economies covered, while Poland recovered most of June’s sharp fall.
The wider picture was less convincing. France returned to contraction, Italy lost momentum and Spain moved only marginally above the 50.0 no-change threshold, with output and orders still falling in both France and Spain.
Eurozone: faster production masks weak demand
The final eurozone manufacturing PMI rose by 0.5 points to 51.9 in July, remaining above the 50.0 threshold for a sixth consecutive month. The reading was marginally below the earlier flash estimate of 52.0 but still represented a stronger expansion than June’s 51.4.
Factory output accelerated more clearly. The Manufacturing Output Index increased from 51.7 to 52.9, its highest level since March 2022 and consistent with the fastest rise in production for almost four-and-a-half years.
The composition of that growth, however, was less encouraging. New orders continued to fall, while demand from export markets deteriorated again. Manufacturers supported production partly by working through outstanding orders, meaning July’s output growth was not matched by an equivalent improvement in incoming demand.
Eurozone manufacturers also reduced purchasing activity and ran down stocks of purchases. This suggests firms remained reluctant to rebuild input inventories while demand was uncertain, limiting the potential for a wider restocking-led increase in transport and warehousing activity.
Employment fell again, although business confidence improved to its highest level since February. Input cost inflation eased to a five-month low, providing some relief after the energy and shipping disruption seen earlier in the year, but supplier delays remained a concern in parts of the market.
Latest manufacturing PMI values, July 2026. Values above 50.0 indicate expansion; values below 50.0 indicate contraction.
Germany: exports deliver the clearest industrial upswing
Germany provided the strongest positive signal in the July data. Its manufacturing PMI rose from 50.3 in June to 52.2, matching its highest level since May 2022 and moving the sector further into expansion.
Production increased at the fastest rate since February 2022. New orders rose for a second consecutive month, driven principally by a solid acceleration in export sales, which recorded their strongest growth for more than four years.
That combination is more supportive for freight demand than output growth alone. Rising export orders indicate the potential for stronger cross-border flows of finished goods and components, while higher capacity utilisation and efforts to clear backlogs can support inbound factory supply.
Cost pressures also moderated. Input price inflation eased to its lowest level since February, while manufacturers raised their own charges at a slower rate for a third month.
Supply-chain risks nevertheless remained. Delivery times lengthened again, partly because of bottlenecks in electronics supply, while manufacturers’ expectations remained below the levels recorded before the recent escalation of geopolitical and energy-market uncertainty.
UK: output accelerates despite lower headline PMI
The final UK manufacturing PMI fell from 52.5 in June to 51.9 in July, a four-month low. The reading remained above 50.0 for a ninth consecutive month, but it was considerably weaker than the flash estimate of 52.8.
The lower headline figure concealed faster growth in production and new orders. Output rose at its strongest pace for almost two years, while total new business increased more quickly as manufacturers reported stronger demand from domestic and overseas customers.
Export orders improved, with firms citing higher sales to markets including the EU, the United States, Canada, China, India and South Korea. This provides a more constructive signal for port-related movements, international road freight and manufacturing supply chains than the headline decline alone would suggest.
Employment growth, however, was close to stagnation as firms remained cautious about adding capacity. Purchasing activity and input inventories also fell, indicating that manufacturers were not yet preparing for a sustained acceleration in demand.
Input cost and selling-price inflation eased as supply pressures moderated and supplier delivery times improved. For UK haulage, the July survey is consistent with firmer production-related volumes, but cautious stock policies and limited hiring suggest manufacturers still view the recovery as uncertain.
Poland: sharp rebound leaves manufacturing below 50
Poland recorded the largest month-on-month PMI improvement in the comparison. The index rose from 46.1 in June to 49.0 in July, recovering most of the previous month’s fall but remaining below the no-change threshold.
Output and new orders continued to decline, though both contractions slowed substantially. Export orders also fell, but at their weakest rate since January, suggesting that external demand remained subdued rather than deteriorating as rapidly as in June.
Employment increased for the first time since April 2025. Although the rise was modest, it marked a notable change after more than a year of factory workforce reductions and suggests that some manufacturers expect workloads to stabilise.
Purchasing and stocks of inputs continued to decline, limiting the immediate prospect of an inventory-driven increase in factory supply movements. Poland’s position as a major production and road freight market means the rise to 49.0 is a positive short-term development, but the continued fall in orders leaves little evidence of a full recovery.
Germany’s stronger export performance could eventually improve demand among Polish suppliers linked to German and wider European industrial chains. July’s Polish figures, however, still point to cautious production planning and restrained manufacturing-related freight demand.
Southern Europe loses momentum, while France contracts
Italy’s manufacturing PMI fell from 52.2 in June to 51.3 in July, its lowest level for four months. Overall factory conditions continued to improve, but earlier support from customer stockpiling faded and total new orders fell again.
Export orders declined for the first time in five months, while manufacturers reduced employment and purchasing activity. The combination suggests that Italian output may be harder to sustain without a recovery in underlying customer demand.
Spain moved narrowly back into expansion, with its PMI rising from 49.7 to 50.2. The headline improvement was not matched by the main demand indicators: production fell for a second month and new orders declined for a third, although the falls were much weaker than in June.
Spanish export orders contracted more quickly than total new business. Supplier delivery times also lengthened noticeably as shipping disruption and supply bottlenecks continued, although input and output price inflation eased to five-month lows.
France recorded the clearest deterioration. Its PMI fell from 51.2 in June to 49.8 in July, below both the 50.0 threshold and the earlier flash estimate.
French production, new orders and purchasing activity all declined more quickly, while export orders fell at their sharpest rate for a year. Weak customer confidence, geopolitical uncertainty and price pressures were among the factors reported by manufacturers.
What the data suggests for freight demand
July’s PMI data point to a moderate expansion in European manufacturing, but the geographic and sectoral distribution remains uneven. Germany generated the clearest combination of rising output, new orders and exports, while Poland’s downturn eased sharply.
The eurozone’s strong Output Index is supportive of immediate factory-related transport volumes. Manufacturers producing and completing more goods require raw-material deliveries, component movements and outbound distribution, particularly across industrial supply chains centred on Germany.
However, the continued weakness in eurozone new orders limits the forward signal. Production supported by backlogs can raise freight volumes temporarily, but those volumes may soften once existing work is completed unless new business begins to recover.
Export demand remains especially important for international road freight. Germany recorded a significant rise in export orders and the UK also reported stronger overseas sales, but eurozone exports declined overall, with weakness in France, Spain, Italy and Poland.
Inventory behaviour offers little evidence of a wider restocking cycle. Eurozone manufacturers reduced stocks of purchases, while purchasing activity and input inventories also fell in the UK, Poland and Italy. This is consistent with limited growth in inbound materials transport and cautious demand for additional warehousing space.
Cost conditions became somewhat less severe as input inflation eased in several markets. Yet longer delivery times in Germany and Spain, together with continued energy and shipping uncertainty, mean logistics costs and supply reliability remain potential constraints.
The short-term signal is therefore one of selective improvement rather than a synchronised European manufacturing rebound. Industrial freight linked to Germany and parts of the UK may strengthen, while weaker orders elsewhere point to continued volatility in cross-border volumes.
