Eurozone PMI Manufacturing was finalized at 51.6 in March, up from 50.8, marking a 45-month high and signaling continued, albeit modest, expansion in the sector.
However, according to Joe Hayes, Principal Economist at S&P Global Market Intelligence, the Middle East war has already begun to leave a clear imprint on the sector. He noted that suppliers’ delivery times have risen sharply as logistics adjust to maritime disruption, while surging oil prices have pushed input cost inflation to its highest level since late 2022.
Hayes also highlighted that firms have started passing these higher costs through to customers, “reducing the Eurozone’s competitiveness and this will likely put demand under renewed pressure.”
Despite steady output and order growth, Hayes emphasized that expansions remain “tepid” and vulnerable. He warned that it may not take much for output and sales to turn lower, particularly if the conflict persists and cost pressures intensify.
