The Eurozone’s manufacturing sector is showing encouraging signs of bouncing back to levels last seen before the pandemic shook global economies. After a long stretch of challenges, recent data reveals that factory output and new orders are stabilizing, signaling a tentative but meaningful recovery.
For over three years, manufacturers in the Eurozone faced declining demand and shrinking order books. But in June 2025, this trend finally halted. New work volumes stopped falling for the first time since early 2022, indicating that businesses are starting to see steadier demand both at home and abroad. This stabilization is crucial because it suggests companies might soon ramp up production after holding back for so long.
Production itself edged into expansion territory again in June, though only marginally. The Purchasing Managers’ Index (PMI), which gauges manufacturing health on a scale where above 50 means growth, nudged up slightly to 49.5 from 49.4 in May—just shy of outright expansion but still marking a significant improvement compared to previous months when contraction was more pronounced.
What’s particularly interesting is how optimism among manufacturers has climbed to its highest point since February 2022. This renewed confidence reflects hopes that demand conditions will improve further over the next year across both domestic markets and exports. Businesses appear cautiously optimistic about future prospects even as they continue trimming employment and purchasing activity for now—a sign they’re preparing carefully rather than rushing headlong into growth.
However, not all parts of the Eurozone are moving forward at the same pace. For example, France’s industrial sector remains under pressure with manufacturing output declining recently and economic momentum weakening there more than elsewhere in Europe’s core economies.
Still overall, these developments paint a picture of an industry gradually regaining its footing after years marked by uncertainty—from supply chain disruptions to fluctuating consumer demand—and adapting to new economic realities post-pandemic.
In essence, while full recovery isn’t here just yet across every corner of Europe’s manufacturing landscape, key indicators show factories are no longer shrinking but inching back toward pre-pandemic activity levels—a hopeful sign that better days may lie ahead for this vital part of Europe’s economy.