The Purchasing Managers’ Index (PMI) is a closely watched economic indicator that tracks changes in business activity across manufacturing and services sectors. A headline figure above 50 signals expansion, while a reading below suggests contraction. The June 2025 PMI data point to a stabilisation of economic activity in the eurozone, with a modest return to growth driven primarily by the services sector. However, performance varied sharply across individual countries, underscoring an uneven recovery across the continent.
According to S&P Global’s final figures, the eurozone’s Composite PMI rose to 50.6 in June, revised slightly down from the earlier flash estimate of 50.8, and marking the first private-sector expansion since June 2023.
The improvement was led by the services sector, where the Services PMI came in at 50.5, indicating marginal growth. In contrast, the Manufacturing PMI remained deep in contraction at 45.6 (flash figure), reflecting continued weakness in factory output and new orders.
While new business inflows improved in services, manufacturing demand continued to decline, albeit at a slower pace than earlier in the year. Input cost inflation remained relatively subdued, and job creation was uneven, with employment rising in services but still under pressure in manufacturing.
Rising transport costs were identified as a key contributor to inflationary pressure in both France and Spain. In France, transport charges—alongside wages—were among the main drivers of increased input prices in the services sector. Similarly, in Spain, firms reported that rising transport and wage costs led to the sharpest increase in output charges since February, underscoring persistent cost pressures in consumer-facing industries.
Overall, the data reflect a fragile recovery, sustained largely by domestic service activity, while industrial output continues to struggle amid weak external demand.
Germany: Manufacturing drives renewed growth despite weak demand
Germany’s Composite PMI rose to 50.4 in June, up from 48.5 in May, signalling a return to growth in private-sector activity for the first time in four months.
This recovery was primarily driven by a rebound in manufacturing, where the Manufacturing PMI improved to 49.0, the strongest since July 2022. Output growth returned, and business confidence reached a three-month high, particularly among manufacturers.
The Services PMI stood at 49.4, still in contraction, though service providers increased staffing levels at the fastest rate in nearly a year.
Total new orders declined for a 17th consecutive month, albeit at the slowest rate in a year, and firms continued to report weak demand conditions.
Input cost inflation accelerated for the first time since December, especially in services, and output charges also rose.
Overall, the data point to a fragile but notable improvement in Europe’s largest economy, led by the industrial sector.
France: Services edge toward stability, but confidence remains fragile
According to flash estimates, France’s Composite PMI was 48.5 in June, down from 48.9 in May, indicating a slower pace of contraction in private-sector activity.
The Services PMI improved to 48.8, the mildest decline in nine months. Despite this, demand conditions remained weak, with new business falling for the fourth month in a row and export sales declining again.
Employment was broadly stable, though staffing levels dropped slightly in services. Cost inflation picked up, driven by wage pressures and rising transport fees.
While selling price inflation slowed, it remained historically elevated.
Business confidence dipped to its lowest level since January, reflecting growing concern among service providers about economic and political uncertainty following France’s snap elections.
Italy: Manufacturing output drops at fastest pace since last December
Italy’s Manufacturing PMI fell to 45.7 in June, down from 45.6 in May, signalling a deepening contraction in factory activity. Output declined at the sharpest rate in six months, and new orders dropped steeply amid reports of weak client demand, particularly in export markets.
Firms cut purchasing volumes and inventories, and employment slipped for a third consecutive month. Business confidence also deteriorated, hitting a six-month low, as firms cited economic and political instability as key concerns. Input cost inflation turned negative for the first time since July 2020, but selling prices continued to fall due to competitive pressures.
Italy’s Composite PMI, drawn from eurozone-wide data, was 51.1, indicating overall private-sector growth, sustained mainly by services.
Spain: Private-sector growth continues, but momentum slows
Spain’s Composite PMI rose to 52.1 in June, up from 51.4 in May, confirming a continued expansion in private-sector output. However, the pace of growth slowed, particularly in services.
The Services PMI dropped to 52.3, down from May’s 56.9, marking a five-month low. Business activity and new orders both rose, but growth softened significantly.
Firms reported a renewed increase in input costs, especially energy and wages, prompting the sharpest rise in output prices since February.
Despite these pressures, employment rose and business confidence remained upbeat, albeit slightly lower than in May.
Poland: Manufacturing downturn deepens amid weakest demand since 2022
Poland’s Manufacturing PMI dropped sharply to 44.8 in June, down from 47.1 in May; the lowest level since April 2023 and marking the steepest downturn in over two years. Output, new orders, and purchasing activity all fell at accelerated rates, with companies citing weak demand across both domestic and export markets.
Input costs fell for the 11th month running, with price declines in metals and fuel widely reported. However, this did not translate into stronger sales, as clients remained cautious.
Firms also cut employment for the first time in four months, and backlogs of work continued to decline.
Business confidence slipped to its lowest point since December 2022.
No Composite PMI has been published for Poland at the time of writing.
UK: Services sector supports modest growth as job market cools
The UK’s Composite PMI rose to 52.3 in June, up from 52.0 in May, signalling a modest expansion in private-sector output. The growth was driven entirely by the services sector, where the Services PMI climbed to 52.8, the highest reading since August 2023.
Despite the improvement, business activity was supported almost exclusively by domestic demand, as export sales fell for the fourth consecutive month.
Firms also noted softer hiring trends: while some companies continued to recruit, others delayed or froze hiring in response to high wage costs and economic uncertainty.
Input cost inflation remained elevated, especially for wages and energy, though the pace of increase was slightly slower than in May. Output charges rose at the weakest pace in three years, suggesting margin pressure.
Nevertheless, business confidence strengthened, with firms citing improved economic visibility and expectations of interest rate cuts later in the year.
