Eurozone: Limited decline in business climate for the manufacturing sector in June 2026 and recovery in servicesWill the same causes produce the same effects? In other words, will the war in Iran and the resulting surge in oil and gas prices lead to an inflationary shock comparable to that seen in 2022? Will their negative effects on growth be the same as those of the war in Ukraine and the subsequent energy shock?
We have selected a set of indicators to track the impact of this new energy shock — caused by the war in the Middle East — on activity and prices in the Eurozone, the United States, oil and gas markets and emerging countries, and to see how much the current situation resembles that of 2022 at the outbreak of the conflict in Ukraine.
This dashboard features charts and comments and will be updated on a monthly basis for as long as necessary.
The expectation that the surge in inflation, driven by this new energy shock, would be more moderate than in 2022 (with demand being less dynamic and supply less constrained) is confirmed. Following the Memorandum of Understanding signed in mid-June between the United States and Iran, inflationary risk has eased but has not disappeared. This MoU has reduced the risk of a severe escalation of the conflict, but the resurgence of tensions and military strikes in mid-July shows that the situation is far from resolved.
When we compare the impact on economic activity of the current energy shock with that of 2022 (following the conflict in Ukraine), the favorable point in 2026, for the euro area, is the business climate in the manufacturing sector, which is holding up better than in 2022. Consumer confidence has fallen sharply but to a lesser extent in 2026 than in 2022. As for the deterioration in the business climate in the services sector, it was immediate in 2026, whereas it occurred with a few months' delay in 2022.
