Eurozone Growth Slows as October PMI Hits Four-Month Low

Eurozone growth is losing momentum: third-quarter GDP rose 0.4%, down from 0.6% in the prior quarter, while October’s composite PMI fell to a four-month low of 51.7, still indicating expansion and pointing to growth of about 0.3% at the start of the fourth quarter. Conditions varied across countries, with France contracting and Italy stagnating in the third quarter, while Spain and the Netherlands grew; Ireland’s unusually strong result was largely driven by multinational accounting activity. October surveys also showed near-stagnant new orders, weaker business confidence and a marginal decline in employment, alongside faster input-cost inflation. Separately, the ECB wage tracker projects negotiated wage growth of 2.3% for 2026, rising to 2.8% in the first half of 2027 before moderating to 2.4% in the third quarter, though coverage for that later estimate is limited. Rising energy costs, geopolitical uncertainty and tighter financing conditions pose risks to the outlook, even as investment in technology, defense and infrastructure offers support.