Latest Purchasing Managers' Index shows the Eurozone still expanding, with the composite at 50.5 (15th straight month above 50).
But the story is not growth — it’s how that growth is changing.

Germany Driving, Services Slowing
Germany manufacturing has rebounded to 51.7 (45-month high), now leading the cycle.

At the same time:
Services are losing momentum
Growth is becoming narrow and less balanced
Inflation Pressures Returning
Input costs at 3+ year highs
Output prices rising
→ Early signs of cost-driven inflation building again

Macro Pressure Building
The Middle East conflict is starting to impact:
Costs
Confidence
Demand expectations

Market View
This is not a clean recovery.
Growth → still positive, but fragile
Inflation → rising again
Policy → less flexible
→ Early stagflation risk forming

Bottom Line
Germany is driving growth — but the structure is weakening.
This is not a breakout.
It’s a fragile transition phase.