Deterioration from a good level. The composite PMI has been in expansionary territory for five months. However, it fell to 50.1 in September (-3.4 pts m/m), dragged down by the services PMI (50.8; -3.4 pts m/m), which had reached an 18-month high in August. The manufacturing PMI was weakened in September by the ‘production’ (-3.6 points to 45.7) and ‘new export orders’ ?(-0.9 points to 40.9) sub-components. The July decline in industrial production (-5% 3m/3m, +0.1% y/y) suggests a backlash after a surge in growth linked to expectations of US tariff increases.
Modest increase in consumption. Retail sales rose slightly in August (+0.5% m/m; +0.7% y/y), at the same pace as in July. The BRC (British Retail Consortium) confidence index climbed to 2.9% y/y in August. The GFK household confidence index stood at -19. This is down two points from July and below its long-term average.
First signs of stabilisation? Unemployment stabilised at 4.7% in June (three-month average) for the third consecutive month. Payroll losses slowed over the last two months (-6,557 in July-August compared with -22,192 in May-June) but remain significant over one year (-126,953 over one year in August, the sharpest annual decline since the Covid pandemic). The number of job vacancies rose slightly (+8,000 m/m) for the first time since April 2022. Regular pay growth continues to outpace inflation (+4.6% y/y), while purchasing power gains are at their slowest pace since 2023 (+0.9% y/y).
Persistent inflationary pressures. Headline inflation remained stable at 3.8% y/y in August, with moderation in services (+4.7% y/y vs. 5% y/y) offsetting inflation in goods prices which reached their highest level since 2023 (+2.8% y/y vs. 2.6%). Core inflation (excluding energy, food, alcohol & tobacco) slowed slightly to 3.6% y/y. Household inflation expectations for the coming year are stable (+4%, Citi-YouGov).
The pullback would continue in Q3 before a rebound in Q4. After a strong Q1 (+0.7% q/q), a slowdown in growth was observed in Q2 (+0.3% q/q) and is likely to persist in Q3. At the end of this downturn, Q4 would see a rebound, helped by the ongoing monetary easing. A solid first half of the year and the accumulated favorable growth will enable 2025’s growth to bounce back to an average of 1.3% on an annual basis.
Completed on October 3, 2025.
Our nowcasts for Q3 2025 highlight resilient GDP growth in the Eurozone and France. In Italy and Germany, two economies that suffered a setback in Q2 after a very good Q1, we expect growth to strengthen in Q3 and more markedly in Q4 [...]
The recovery in PMI indices continues despite a decline in industry. In September 2025, the composite PMI reached its highest level since May 2024 (51.2), an improvement attributable to services (51.4) [...]
Rates on new investment loans (irf>5 years) to non-financial corporations in the Eurozone fell very slightly in July 2025 for the second consecutive month. At 3.58%, however, they remained close to their June 2025 level [...]
The decline in the IFO index in September does not impede the upward trend that began in early 2025. The relative weakness in September particularly affected services and retail trade [...]
In France, the improvement in certain sectors is not spreading to others. The composite business climate has been stable for five months, at 96 [...]
In September, the economic sentiment index remained below its long-term average, held back by industry with a production index still in negative territory (-17.4) and production forecasts declining (-0.9) [...]
In Spain, business confidence strengthened in September and remains well above its long-term average. In industry, the index remains in contraction territory but is improving (-4.7; +1.1 pts m/m) [...]
The non-manufacturing ISM fell markedly in September to 50.0. This result was due to a decline in business activity and new orders components. Manufacturing ISM improved to 49.1 in September, driven by output growth (51.0) [...]
The Tankan survey reported an improvement in large Japonese manufacturing companies' sentiment (14) in Q3, including in the motor vehicles sector (10). The overall figure (all enterprises and all industries) remained stable (10) [...]
In the Chinese manufacturing sector, the official PMI has remained in contraction territory since April, but it improved to 49.8 in September. The PMI published by RatingDog (formerly Caixin) also improved (to 51.2 from 50.5 in August and 49 [...]
Pouvez-vous nous aider à améliorer le site en répondant à ce court questionnaire ?Toutes vos réponses sont anonymes et ne seront utilisées qu’à des fins d’amélioration.Temps estimé : 3 minutes
