Economic Buzz: Eurozone business activity continues to rise, but new orders stall

The seasonally adjusted HCOB Flash Eurozone Composite PMI Output Index posted above the 50.0 no-change mark for the ninth consecutive month in September to signal a further expansion of activity across the euro area?s private sector. At 51.2, the index was up slightly from August?s reading of 51.0 and pointed to a modest monthly rise in output that was the most pronounced since May 2024.

Business activity continued to rise in the Eurozone during September, continuing the trend seen since the start of 2025. That said, new orders failed to maintain the growth seen in August and were unchanged over the month.

Employment was also kept unchanged as business confidence dipped to a four-month low. Meanwhile, inflationary pressures softened, with both input costs and output prices increasing at weaker rates at the end of the third quarter.

The acceleration in the pace of growth in business activity was due to the service sector posting the fastest rate of increase in 2025 so far. Manufacturing production also rose, but the rate of expansion eased from the near three-and-a-half year high registered in August and was only slight.

The overall increase in business activity was recorded in spite of a stable picture for new orders. New business was unchanged in September, following a first rise in 15 months during August.

New export orders have decreased in each month since March 2022, and the latest modest decline was the most pronounced in six months.

The lack of growth in new orders meant that companies often used the clearance of outstanding business to support output growth in September. Backlogs of work fell modestly, and at the fastest pace in three months.

With new orders unchanged, employment was also kept stable in September, thereby ending a six-month sequence of job creation.

Purchasing activity in the euro area manufacturing sector decreased again in September, extending the current sequence of decline to 39 months.

Although companies in the euro area remained optimistic that output will rise over the coming year, business sentiment dipped to a four-month low in September and was below the series average.

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