European manufacturing braces for continued trade turbulence
EU Manufacturing's Fresh Expansion Chapter Forecast as Gradual Progress
Things were looking up for European manufacturing, with a hint of recovery on the horizon. But alas, a new period of trade chaos looms. The once steadfast industry is now grappling with a fresh wave of uncertainty, according to recent reports.
Modest signs of progress can be seen, though the sector remains cramped in a contracting territory. The Eurozone Manufacturing PMI edged up to 48.7 in April 2025 from 48.6 the previous month [4]. This subtle boost reflects a slow but steady stabilization, yet the crucial benchmark of 50 remains elusive.
European automakers experienced a much-needed respite in March, with production levels holding steady after a 21-month slump [2]. However, ongoing cost pressures continue to weigh on the industry, with slower job reduction and improved supplier delivery times noted [4][2].
Upcoming U.S. automotive tariffs pose a significant threat, as the March 2025 data doesn't account for their potential impact. The April PMI results, due for release in May 2025, will provide valuable insights into the immediate disruptions that may follow [2].
The metals and mining sector lags behind, marked by protracted declines in new orders and employment [2]. Other segments face similar challenges, with sluggish new orders impacting heavy manufacturing, and food and beverage output dipping slightly in March [2][4].
Adding fuel to the fire, input costs have spiked at their highest rate since August 2024 [4]. output price increases, while moderate, continue to strain the industry.
Despite the promising developments in the Eurozone’s manufacturing PMI in March 2025 - indicating the highest output expansion in two years [4] - stubborn headwinds persist. Trade policy shifts, coupled with uneven demand recovery, paint a cautionary picture of fragility in the sector’s rebound.
The impending threat of US automotive tariffs has led to a heightened sense of uncertainty within the European manufacturing industry, potentially postponing financial recovery. Industrial sectors such as heavy manufacturing and food and beverage are struggling with sluggish new orders, mirroring the turmoil in the metals and mining sector. Despite a slight increase in the Eurozone Manufacturing PMI, the ongoing input cost increases and output price strains suggest that the post-trade turbulence recovery may be neither swift nor stable.
