Eurozone Private Sector Growth Cools in October as French Output Contracts

05:25 AM EDT, 10/23/2026 (MT Newswires) -- Private sector growth across the euro area lost momentum at the start of the final quarter of 2026, weighed down by slowing business activity and a renewed economic contraction in France amid ongoing domestic unrest. The S&P Global Flash Eurozone Composite PMI Output Index fell to 51.9 in October from the previous month's 53.1, according to data from S&P Global published Friday. The seasonally adjusted provisional reading sits below the consensus estimate of 52.7 and marks the fourth straight month of business growth, albeit the slowest pace during this period. The manufacturing PMI slipped to a three-month low of 52.4, down from 52.9 in September and the market forecast of 52.7. On the services side, the PMI stood at a two-month low of 51.7, compared with the earlier figure of 53 and the expected 52.6. While output and new orders expanded for a fourth consecutive month, both indicators increased at the slowest rate in the current sequence. Notably, new export order growth outperformed total new business and increased for the third successive month, even as the rate of expansion eased, signaling an improved picture after nearly four and a half years of sustained monthly declines. Following its first expansion in ten months in September, France's private sector output fell back into contraction in October amid renewed weakness in the services sector. Conversely, both Germany and the wider eurozone maintained positive growth, even as growth rates moderated. "Higher interest rates are also starting to take a toll, dampening demand, and the picture of sustained growth and stubbornly elevated inflation from the October flash PMI will likely add to further speculation of more aggressive policy tightening from the ECB," S&P Global Market Intelligence Chief Business Economist Chris Williamson said, adding that heightened inflationary headwinds, including a sharp rise in input costs, are one of the reasons for the broader slowdown. Business confidence across the eurozone fell to its lowest level in five months, with manufacturing sentiment experiencing a "particularly sharp" decline. While the rest of the bloc maintained positive sentiment, France suffered from deepening pessimism driven by political instability and uncertainty.