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Macro EconomyMedium•2 November 2026•
2 min read

Euro Zone Activity Index at 51.9 in October as Manufacturing Slows and Energy Costs Rise

Key Facts

1The flash composite output index fell to 51.9 in October from 53.1 in September, while remaining above 50.
2The flash manufacturing output index fell to 52.4 in October from 53.6 in September.
3A Reuters poll forecast quarterly euro zone growth of 0.2% in the third quarter, while growth came in at 0.4%.
4The European Central Bank scheduled the flash estimate of euro zone inflation for October for November 4, 2026.

Euro zone private-sector activity slowed in October, with the flash composite output index falling to 51.9 from 53.1 in September, according to S&P Global. A reading above 50 indicates that activity is still growing, but at a weaker pace than the previous month. In manufacturing, the flash output index fell to 52.4 from 53.6 in September. S&P Global said the composite index was consistent with quarterly gross domestic product growth of 0.3% in October. That compares with a pace of 0.4% in September, weakening the momentum picture suggested by earlier activity data.

The manufacturing slowdown was not limited to output: flows of new orders eased to modest growth, while employment neared a standstill, according to S&P Global. The firm said order flows showed "modest growth in demand," while employment was close to stagnation. These indicators put output growth in the context of weaker demand and a slowdown in hiring. At the same time, industrial input costs rose at a faster pace as energy prices climbed. S&P Global said companies raised selling prices to protect their margins from those pressures.

The slowdown also featured in estimates for the broader economy, with S&P Global saying the flash Purchasing Managers’ Index reading was consistent with quarterly growth of 0.3% in October, compared with 0.4% in September. The euro zone recorded quarterly growth of 0.4% in the third quarter, exceeding the 0.2% forecast in a Reuters poll, according to Reuters via Euronext. Third-quarter growth was slower than the 0.6% recorded in the previous quarter. Performance varied among the major economies: Germany grew 0.2%, while Spain and the Netherlands each grew 0.6%. By contrast, the French economy contracted 0.1%, while Italy’s economy was unchanged.

France was among the sources of weakness highlighted by S&P Global, with business confidence at its lowest level since 2012, excluding the pandemic period. The firm said the index pointed to the French economy slipping into contraction, in line with France’s GDP contraction in the third quarter. On prices, the increase in selling prices in October was among the largest since early 2023, according to S&P Global. It added that price indicators suggest consumer inflation will remain well above the European Central Bank’s 2% target in the coming months. The euro zone’s seasonally adjusted flash estimate for October’s harmonised inflation is due on November 4, 2026, according to the ECB calendar.