Business activity across the eurozone expanded at its fastest pace in more than three years in September, as a surging services sector and steady manufacturing defied the headwinds of elevated energy prices from the US-Iran conflict and ongoing Strait of Hormuz disruptions.
The eurozone composite PMI rose to 53.1 in September from 52.0 in August, comfortably above the 51.7 consensus, marking a 41-month high and the strongest reading since April 2023, according to S&P Global data cited by Scotia Wealth Management. Manufacturing held steady at 52.7 for an eighth consecutive month of expansion, with new orders rising to their highest level since March 2022, while the services PMI surged to 53.0 from 51.6 — a 10-month high.
Germany and France lead the way
Germany's composite PMI jumped to 53.8 from 51.8, the highest reading since October 2025. The beat was driven by services, which climbed to 52.9 from 49.7 — the highest since February 2026 and well above expectations — reversing five months of contraction. Manufacturing remained in expansion for an eighth straight month.
France posted its strongest performance in more than two years, with the composite PMI rising to 51.2 from 48.5, a 25-month high that beat the 48.7 consensus. Services jumped to 51.4 from 48.0, the highest since November 2025, ending eight consecutive months of contraction, with the end of extreme heat that had weighed on August activity also providing a lift.
UK cools as ECB outlook turns hawkish
The UK bucked the trend: its composite PMI slipped to a three-month low of 51.7 from 52.5, missing the 52.0 consensus. Manufacturing improved to 52.0 for an 11th straight month of expansion, but services softened to 51.7, with geopolitical uncertainty and a weak domestic environment blamed for the drag.
The stronger-than-expected eurozone data reinforced expectations that the European Central Bank will maintain a hawkish stance, weighing on European sovereign bonds. Meanwhile the US dollar extended its advance to a fourth straight session, Brent crude rebounded above $100 and gold slipped as higher real yields and a stronger dollar weighed on demand.
Sources:
Scotia Wealth Management: Morning Strategy Note — Global PMIs signal growth despite headwinds
The eurozone composite PMI rose to 53.1 in September from 52.0 in August, comfortably above the 51.7 consensus, marking a 41-month high and the strongest reading since April 2023, according to S&P Global data cited by Scotia Wealth Management. Manufacturing held steady at 52.7 for an eighth consecutive month of expansion, with new orders rising to their highest level since March 2022, while the services PMI surged to 53.0 from 51.6 — a 10-month high.
Germany and France lead the way
Germany's composite PMI jumped to 53.8 from 51.8, the highest reading since October 2025. The beat was driven by services, which climbed to 52.9 from 49.7 — the highest since February 2026 and well above expectations — reversing five months of contraction. Manufacturing remained in expansion for an eighth straight month.
France posted its strongest performance in more than two years, with the composite PMI rising to 51.2 from 48.5, a 25-month high that beat the 48.7 consensus. Services jumped to 51.4 from 48.0, the highest since November 2025, ending eight consecutive months of contraction, with the end of extreme heat that had weighed on August activity also providing a lift.
UK cools as ECB outlook turns hawkish
The UK bucked the trend: its composite PMI slipped to a three-month low of 51.7 from 52.5, missing the 52.0 consensus. Manufacturing improved to 52.0 for an 11th straight month of expansion, but services softened to 51.7, with geopolitical uncertainty and a weak domestic environment blamed for the drag.
The stronger-than-expected eurozone data reinforced expectations that the European Central Bank will maintain a hawkish stance, weighing on European sovereign bonds. Meanwhile the US dollar extended its advance to a fourth straight session, Brent crude rebounded above $100 and gold slipped as higher real yields and a stronger dollar weighed on demand.
Sources:
Scotia Wealth Management: Morning Strategy Note — Global PMIs signal growth despite headwinds
