Eurozone PMIs (June, flash): Goldilocks for the ECB

Research evidence excerpt

Eurozone PMIs (June, flash): Goldilocks for the ECB

Economics - Data Reactions

23 June 2026

Implications

Despite a rebound in June, activity is lacklustre and in isolation, the PMIs point to a -0.1% q-o-q contraction in Q2. Risks to the ECB

staff forecast of 0.2% q-o-q are therefore skewed to the downside, though headline GDP may once again be affected by Ireland’s

unique growth dynamics. Still, today’s print will have been music to the ears for members of the ECB Governing Council.

Activity is sluggish but not falling off a cliff, with services the main source of weakness as consumers noticing a drop in real

disposable income reduced consumption. The June drop in manufacturing meanwhile overshadows the strengthening in forward-

looking components as the mechanical drag from shorter supplier delivery times affected the headline index.

At a country level, the slowdown is more acute in France and Germany than the rest of the eurozone though the French national

survey from INSEE confirmed the June activity improvement – with a more modest uptick compared to the PMIs – and we expect

Germany’s ifo survey tomorrow to show a more stable reading than indicated by the PMIs. We tend to give more weight to national

surveys given larger sample size.

Positively, pricing indicators eased in June as the composite input price component fell to the lowest since the Middle East conflict

began and the rate of output price inflation also slowed, although to a lesser extent. So far, signs of pass-through from rising costs to

consumers remain limited. However, some of the survey responses were likely collected after the US-Iran interim agreement was

announced and took some heat out of energy markets, which may overstate the decline.