Euro area: PMI shows broad-based improvement in July

Research evidence excerpt

Euro area: PMI shows broad-based improvement in July

J P M O R G A N Europe Economic Research

24 July 2026

Euro area: PMI shows broad-

based improvement in July

• PMI rise points to 1.4%ar growth, implying upside risks to our 1% 3Q Economic and Policy Research

forecast Mariana Monteiro

• Broad-based improvement in activity across sectors and region (44mariana.reispaivamonteiro@jpmorgan.com20) 3493-5147

J.P. Morgan Securities plc• Price indicators are not yet showing impact from renewed increase in

energy prices and geopolitical tensions

The flash Euro area composite PMI rose 1.9pts to 51.9 in July, despite renewed

geopolitical tensions and higher energy prices. Given that tensions intensified

during the survey period, the final release will be important in assessing whether

the improvement evident in the flash data was sustained through the latter part of

the month. At face value, however, today's reading is consistent with economic

growth running at around a 1.4%ar pace at the start of 3Q, pointing to upside risks

to our current forecast of 1%ar growth.

The improvement was broad-based, but led by services, where the PMI rose 2.1pts

to 51.6 (growing 1.1%ar). This coincided with yesterday's further improvement in

consumer confidence, with both indicators recovering from the initial

deterioration seen at the onset of the conflict. That said, manufacturing continues

to outperform, with the output index rising 1.3pts to 53.0 – the highest level since

the start of the war in Ukraine and consistent with IP growth of ~1.3% ar. The

acceleration in activity across both sectors was driven by stronger demand

conditions. While still subdued in absolute terms, forward-looking indicators,

including future output and hiring intentions, also improved. The latter is now