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The composite PMI dropped from 52.8 to 51.9 in December, with manufacturing output declining again. Overall, this reading still corresponds to decent GDP growth for the eurozone in the fourth quarter of 2025.

Despite the decline, the composite PMI does remain at a decent level, which indicates that the fourth quarter is likely to see positive GDP growth for the eurozone. New orders continue to grow, as does employment. Besides that, input prices continue to rise, which supports inflation at the current pace of around 2%.

The manufacturing PMI had seen a recovery over the course of the year, starting at 46.6 in January and peaking at 50.7 in August. Since then, it has been declining again, falling to 49.2 this month. The services PMI followed a different path with a bottom in May and now remaining firmly above the neutral 50 level at 52.6. Interestingly, sentiment actually slumped in the service sector, while manufacturers became more upbeat.

The year ends on a familiar note for growth: Germany and France have underperformed slightly, while the rest of the eurozone – where PMI details aren’t broken down – remains strong.

Despite all the global uncertainty, the eurozone economy has kept its head above water throughout the year. While we are cautious about expecting a strong acceleration, we do expect a gradual pickup in economic growth over the course of 2026.

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