Eurozone Factories Stockpile as War Fears Hit Confidence

Manufacturers across the Eurozone accelerated purchases of raw materials in April, building up inventories amid fears of supply disruptions and rising costs linked to tensions in the Middle East. The S&P Global Eurozone Manufacturing PMI rose to 52.2, indicating growth, as both producers and customers rushed to secure supplies before prices climb further.

Despite the uptick in activity, business confidence weakened significantly. Future output expectations fell to their lowest level in 17 months, reflecting growing uncertainty about the economic outlook. While new orders grew at their fastest pace in four years, economists noted that much of this demand was driven by precautionary buying rather than genuine long-term growth.

Rising input costs and supply chain disruptions added further pressure, with delivery times slowing and inflationary trends intensifying. The European Central Bank has signalled concerns over persistent inflation, raising expectations of upcoming interest rate hikes. Although manufacturing activity expanded across all monitored countries, employment continued to decline, highlighting underlying fragility in the sector.

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