The latest Purchasing Managers’ Index (PMI) figures for August 2025 offer a cautiously optimistic signal for Europe’s logistics sector. For the first time since mid‑2022, manufacturing activity in the eurozone returned to growth, with the headline index rising to 50.7. Any reading above 50 indicates expansion, while figures below that threshold point to contraction.
The improvement was broad-based, with output increasing and new orders returning to growth. However, the recovery remains uneven across the continent and fragile in its foundations. Export demand continues to fall, employment levels are still under pressure, and many firms are working through existing backlogs rather than building inventories. For transport operators, this means a possible uptick in short-term volumes—but persistent volatility in demand and direction.
Eurozone: Manufacturing returns to growth, but cracks remain
August’s eurozone manufacturing PMI rose sharply from 48.9 in July to 50.7, marking the first sign of expansion in over two years. Growth was driven primarily by domestic orders, with total new business rising for the first time since March 2022. Output volumes also picked up, and confidence among manufacturers reached a 28-month high.
However, the positive headlines mask some key concerns. Export demand continued to decline for the 18th consecutive month, and companies reduced staffing levels again, albeit at a slower pace. Backlogs of work fell further, while stocks of purchases and finished goods were depleted—suggesting many firms are still running lean.
From a logistics perspective, the return to growth is welcome news, especially in domestic supply chains. But the ongoing drag from weak export markets, cautious restocking, and selective hiring reflects uncertainty ahead. Transport providers may see improvements in local freight volumes, but long-haul and cross-border flows remain vulnerable to global headwinds.
Germany: Output rebounds, but demand remains soft
Germany’s manufacturing sector edged closer to growth in August, with the PMI rising to 49.8, up from 48.5 in July. This marked the highest reading in 20 months and the sixth consecutive monthly improvement. Although still just below the neutral 50.0 mark, the data points to a notable stabilisation in Europe’s largest industrial economy.
Most significantly for logistics, output expanded for the second straight month, supported by the first increase in new orders since May 2022. Firms also reported greater purchasing activity and longer supplier delivery times—typically a sign of rising input demand. However, this was not enough to prompt job creation, as employment declined for the fifth month in a row.
Export sales remained weak, and overall demand conditions were still described as fragile. Many firms focused on reducing inventory levels and fulfilling backlogs, which continued to fall. Input cost inflation picked up, driven by higher prices for fuel, energy, and metals, while output charges rose modestly.
Implications for logistics:
- Domestic freight volumes are likely rising with the uptick in output and input purchases.
- However, international haulage and export-linked flows may remain subdued.
- Falling inventories and backlogs suggest that warehousing demand could decline in the short term.
The modest rebound is welcome, but the broader outlook is still cautious.
France: Modest return to growth after long contraction
France’s manufacturing PMI rose to 50.4 in August, up from 49.4 in July, signalling the first expansion in the sector in 31 months. Output and new orders both increased slightly, while firms reported renewed purchasing activity and greater confidence.
However, employment continued to decline, and export demand remained weak. Stocks of finished goods fell, suggesting that many companies are still fulfilling older orders rather than building inventory.
Implications for logistics:
- Domestic freight may benefit from the uptick in activity.
- Ongoing export softness and stock drawdowns signal limited warehouse turnover and subdued international flows.
Italy: Fragile recovery led by domestic orders
Italy’s manufacturing PMI rose to 50.4 in August, up from 48.7 in July, marking the first growth in 17 months. The expansion was driven mainly by a rise in domestic new orders, while export demand continued to decline.
Firms increased output and purchasing activity, but also reduced inventories and cut staff for the seventh consecutive month. Input costs rose slightly, ending a year-long decline.
Implications for logistics:
- Internal transport demand likely picked up with the increase in production.
- Cross-border haulage may remain weak due to falling exports.
- Ongoing destocking suggests limited pressure on storage and distribution.
Spain: Strongest manufacturing growth in Europe
Spain’s manufacturing PMI jumped to 54.3 in August, up from 51.6 in July — the highest in 10 months and the strongest among major European economies. Output, new orders, and employment all rose sharply, and business confidence improved.
Firms also reported rising input costs, driven by fuel and materials, but managed to pass these on through higher selling prices.
Implications for logistics:
- Strong growth signals increased demand for transport and warehousing.
- Rising input costs could impact operating margins across the supply chain.
Poland: Manufacturing slump deepens
Poland’s manufacturing PMI fell to 48.5 in August, down from 48.7 in July, marking a second consecutive monthly decline. Output, new orders, and employment all contracted, with firms citing particularly weak export demand.
Stocks of inputs and finished goods were reduced, and input prices rose slightly after months of decline.
Implications for logistics:
- Weak demand suggests continued pressure on domestic and export freight.
- Destocking may signal lower warehouse activity ahead.
UK: Manufacturing downturn intensifies, hitting freight demand
The UK’s manufacturing sector fell deeper into contraction in August, with the headline PMI dropping to 43.0, down from 45.3 in July. This marks the lowest reading since May 2020, during the early months of the pandemic, and reflects widespread weakness across the sector.
Output declined at one of the sharpest rates in over a year, as manufacturers reported falling demand from both domestic and overseas customers. New orders dropped for the sixth month running, with export sales hit particularly hard by weak international markets and competitive pressures.
Employment in the sector continued to shrink, with job cuts accelerating amid cost-cutting efforts and reduced workloads. Firms also reported a steep fall in backlogs, indicating that existing orders are being completed faster than new ones are coming in. In line with falling demand, purchasing activity was reduced, and inventories of raw materials and finished goods were run down.
On a more positive note, supplier delivery times improved for the eighth consecutive month — a sign of reduced congestion and excess capacity throughout supply chains. However, this improvement appears to be demand-driven rather than due to supply-side efficiencies.
Input cost inflation slowed, with prices for energy, metals, and plastics softening further. Output charges were also reduced on average, as companies sought to remain competitive in a sluggish market.
Implications for logistics:
- Freight volumes are likely to fall further in both domestic and international corridors, particularly in manufacturing-dependent routes.
- Lower order volumes and destocking point to reduced warehousing turnover and shorter delivery cycles.
- While improved delivery times may streamline operations, they also reflect spare capacity — a warning sign for carriers and suppliers reliant on high utilisation rates.
