Goldman Sachs analysts noted significant supply pressure emerging in European economies following the release of preliminary PMI data on Thursday, with the Eurozone's Composite PMI dropping to 48.6 against expectations of 50.1.
The UK's Composite PMI hit 52.0, surpassing the consensus forecast of 49.8, continuing the trend of stronger economic indicators in the UK compared to the Eurozone in 2026.
Goldman Sachs pointed out that both economies are facing clear supply-side pressure, with higher prices for manufacturing inputs and longer supplier delivery timelines noted for the second consecutive month. The ratio of product price growth to resource price growth was about half, reflecting levels seen in the post-COVID-19 pandemic period.
Price growth and extended delivery timelines were particularly pronounced in the UK data. Economists at Goldman Sachs noted that these balance index percentages typically gauge the scale of pressure rather than its overall intensity.
Activity components showed a noticeable drop in the Eurozone after more than a year of stability in the composite index, though the decline was less severe than the fluctuations seen in price metrics and delivery timelines. Expectation components for both economies displayed similar patterns.
In the PMI release notes, there was mention of some front-running stockpiling ahead of expected price hikes and supply chain disruptions, which likely supported the activity data. A sharp increase in supplier delivery timelines contributed positively to the core manufacturing indices, aiding their stabilization.
Goldman Sachs stated that economic data will be crucial for tracking the impact on regional growth and supply chain disruptions caused by the ongoing energy shock.