The Eurozone composite Purchasing Managers' Index (PMI) rose to 49.5 in June, up from 48.5 in May, signaling a slower pace of contraction in overall business activity while remaining below the 50 mark that separates expansion from contraction [1, 2, 3]. The manufacturing sector continued to expand with a PMI of 51.3, slightly down from 51.6 in May [1, 2, 3].
Service sector activity showed signs of easing contraction, helped by reduced price pressures linked to the Middle East conflict and optimism about tourism recovery after a preliminary Iran-US peace agreement [1, 2, 3]. Despite this, new orders still declined, indicating fragile demand [1, 2, 3].
Chris Williamson, chief business economist at S&P Global, said the eurozone economy shows resilience, “just avoiding recession,” with June PMI pointing to roughly flat GDP growth in the second quarter [1, 2]. He added that the recent improvement in the services sector was “encouraging” after the initial impact of the Middle East war, as leisure and tourism demand began to pick up [3].
In France, the private sector contracted for a sixth consecutive month in June, with a composite PMI of 47.6, although this marked an improvement from May’s reading of 44.9 and exceeded expectations of 46 [4]. The contraction was mainly driven by the services industry, while manufacturing returned to expansion territory with a PMI above 50 [4].
Higher energy prices due to the Middle East conflict have weighed on French purchasing power and demand, contributing to the sector’s weakness [4]. The French economy remains fragile, with projected GDP growth between 0.5% and 0.7% for 2026 amid rising unemployment [4]. The conflict could also cost French public finances at least €6 billion [4].
S&P Global released the June PMI data for the eurozone and France on June 23, highlighting the cautious improvement in business activity across the region while noting ongoing challenges related to geopolitical tensions and weak demand [1, 2, 4, 3].
