The Eurozone’s manufacturing sector saw little change in November, with final Purchasing Managers’ Index (PMI) data pointing to continued stagnation across the bloc’s industrial base, Oxford Economics reported on November 28.

The final Eurozone manufacturing PMI was revised slightly down to 49.6, from an earlier flash estimate and October’s reading of 50. The modest downward revision was attributed primarily to weaker-than-expected results from Germany. A reading below 50 indicates contraction.

“Today’s final manufacturing PMIs for November brought only little revisions to the flash figures,” Oxford Economics stated. “The small downtick from October is consistent with the broad stagnation in industrial production we expect in Q4 at the Eurozone level.”

Germany and France, the Eurozone’s two largest economies, continued to weigh on the overall index. Output remained subdued, trending down from already weak levels due to a combination of ongoing headwinds—among them, tariff-related frictions, intensified competition from China, and heightened economic uncertainty across global markets.

In contrast, southern Europe showed signs of resilience. Italy’s manufacturing PMI rose to 50.6, its highest level since March 2023, driven by a rebound in both domestic and international new orders. “Fresh PMI data for Italy revealed an unexpected upturn,” Oxford Economics noted. However, the stronger order pipeline had not yet translated into a significant increase in production.

Spain’s manufacturing sector also outperformed its northern peers, with a PMI reading of 51.5, remaining above the expansion threshold for the second month in a row. “Spain's industry remains substantially above the Eurozone average thanks to solid domestic demand,” Oxford Economics said, though it acknowledged a slowdown in momentum amid growing international competition.

Despite the subdued current performance across the bloc, business sentiment for the year ahead improved modestly. “Better near-term prospects were visible in improved business optimism for the next 12 months, which was above average in November,” the report stated.

However, the continued industrial slump is taking a toll on employment. Firms reduced headcount at the fastest pace since April, amid a demand environment too weak to allow for the pass-through of higher input costs to output prices.

Looking ahead, Oxford Economics expects only a slow industrial recovery in 2025, supported in part by the gradual rollout of Germany’s planned fiscal stimulus.