The July downturn suggests that conditions for South African manufacturers continued to deteriorate month-on-month, albeit at a modest pace. The slip from June’s level points to ongoing headwinds for output, new orders and factory sentiment through mid-2026, keeping the sector on a weaker footing as the third quarter begins.

Despite the decline, the index remains above the 50-point threshold that separates expansion from contraction, signaling that UK manufacturing is still growing, albeit at a slower pace. The easing in the headline figure suggests demand and output may be normalizing after a stronger earlier phase, potentially tempering optimism about the sector’s near-term growth trajectory.

The latest figures, updated on 03 August 2026, will be closely watched by investors and policymakers looking for clues on the durability of the UK’s industrial recovery. A sustained move lower could raise questions about the sector’s resilience, while any stabilization above 50 in coming months would support the view that manufacturing remains on a modest expansion path.

Overall demand, however, remained weak. New orders increased only slightly, and export orders declined once again. Backlogs of work fell for a third consecutive month, posting the steepest reduction since January, as manufacturers continued to cut jobs and scale back purchasing activity.

Cost pressures, while still elevated, eased to a five-month low, enabling factory gate price inflation to cool to its weakest pace since March. At the same time, business confidence strengthened to its highest level since February, though it remained below its long-run average.

Inflation for non-food products remained unchanged at 11.7%, with detergent prices steady at 11.1%. In contrast, inflation in paid services edged up to 9.2% from 9.0%, driven by faster increases in prices for housing and utilities (5.7% vs 5.1%), rental housing (14.6% vs 13.9%), and the maintenance, repair, and security of residential premises (12.5% vs 11.5%).

On a monthly basis, consumer prices rose 0.6% in July, slowing from a 0.8% increase in June and marking the weakest monthly inflation in four months.

Assessments of current business performance (50.0 vs. 49.3) and investment (51.2 vs. 50.7) improved. However, expectations became less optimistic for production (48.6 vs. 51.9), employment (48.9 vs. 50.2), and total order books (47.5 vs. 48.1).

Manufacturing confidence weakened in particular due to a decline in order books in the home electrical appliance industry. High production costs remained the primary business constraint for the fifth consecutive month. Inflation expectations for the next 12 months eased slightly to 2.6%. Meanwhile, the three‑month expected Business Sentiment Index increased to 50.7 from 48.0.

Production growth slowed notably, with the output subindex declining to 54.2 from 57.0 in June, while order books softened slightly to 53.2 from 53.5. Purchasing activity weakened more markedly: purchasing volumes fell into contraction territory, dropping to 48.1 from 50.9, and purchasing inventories declined to 47.5 from 50.4.

Further signs of strain appeared in sales stocks and employment, both of which continued to deteriorate, with sales inventories falling to 46.8 from 48.1 and the employment index easing to 47.7 from 48.9. At the same time, supplier delivery times lengthened further (62.9 vs. 60.9), pointing to increased delivery delays.

On the price front, cost pressures intensified. The input price index rose to 74.2 in July from 72.8 in the previous month, indicating stronger inflationary pressures in the manufacturing sector.

Employment increased at the sharpest rate since November 2025, enabling firms to keep pace with incoming workloads, while backlogs declined for a second consecutive month. Input costs continued to rise, driven by higher material and energy prices, though overall cost inflation showed signs of easing. Output charge inflation also moderated, falling to a four-month low.

Pre-production inventories declined for a fourth straight month, amid longer supplier delivery times linked to shipping delays and shortages. Although business confidence softened slightly, firms remained broadly optimistic about production prospects over the coming year.

Nevertheless, business expectations in the manufacturing sector remain muted and are still below the levels seen before the conflict began. Supply chain disruption continues to pose a risk, with lead times lengthening again in July, partly due to emerging bottlenecks in the global electronics industry.

AstraZeneca fell more than 6% following reports that the pharmaceutical group had held talks with US drugmaker Bristol Myers Squibb over a possible merger. In contrast, housebuilders Persimmon and Barratt Redrow climbed more than 4% as markets pared back expectations for further Bank of England interest rate rises. Banks also advanced, while aerospace engineer Rolls-Royce gained around 3.8%.

While the move from 52.0 to 51.9 is modest, it suggests that the manufacturing upturn in the currency bloc may be stabilizing rather than accelerating. A PMI reading above 50 typically indicates expansion, and the eurozone manufacturing sector remains in growth territory, though with limited additional momentum visible in the latest data. Investors and policymakers will be watching subsequent releases closely for clearer signs of direction in the bloc’s industrial outlook.

The uptick suggests that operating conditions in Greek factories improved further at the start of the third quarter, following an already solid performance in June. Although detailed drivers of the increase were not provided, the rising PMI level typically reflects healthier trends in production, new orders, and overall business conditions within the sector.

With July’s gain, the data point to a manufacturing economy that continues to build momentum, underscoring a period of sustained expansion for Greece’s industrial base in mid-2026.

The July figure marks a notable acceleration in export activity over the early summer period, suggesting continued resilience in the country’s trade sector. While detailed drivers by industry or destination market were not provided, the $3.2 billion increase in exports between June and July highlights a robust upswing at a time when global trade conditions remain closely watched by investors and policymakers.

Market participants will be monitoring whether this momentum can be sustained in the coming months, as Turkey’s export trajectory remains a key indicator for overall economic growth and the country’s external balance. The July result sets a higher starting point for the third quarter and may influence expectations around industrial output, employment in export-oriented sectors, and fiscal and monetary planning.

The flat reading indicates that hiring and job losses were broadly in balance during July. With unemployment holding at the same level for a second consecutive month, market participants and policymakers will be watching upcoming data closely for indications of whether this signals a period of consolidation in the labor market or a pause before the next significant move in employment trends.

The July figure marks a continuation of labor market pressures, as the number of unemployed expanded by 3.4K compared with June. While the scale of the increase is limited, the move upward suggests that job creation has not been sufficient to absorb all job seekers over the period. Investors and policymakers will be watching upcoming releases closely to assess whether this rise signals a temporary fluctuation or the start of a more persistent trend in Austrian unemployment.

Manufacturers cut purchasing activity at the quickest rate since March and continued to run down both input and finished goods inventories. Backlogs of work decreased for only the second time this year, even as employment rose at the fastest pace since December.

Supply-chain pressures remained significant, with delivery times still heavily extended amid shortages of electronic components and chemical products. On the price front, input cost inflation eased to a four-month low, while output price inflation moderated only marginally. Despite the current weakness, business confidence improved, supported by expectations of stronger sales conditions over the coming year.

The number of tourists opting for market-based accommodation as their main lodging slipped by 0.6%. Within this segment, hotel stays decreased by 1.7%, whereas demand for rental accommodation rose by 10.1%. At the same time, the use of non-market accommodation—such as stays with friends or relatives and in privately owned properties—surged by 26.8%.

In the first half of 2026, Spain received approximately 46.6 million international tourists, 4.6% more than in the same period a year earlier. The UK remained the leading source market, with more than 9.3 million visitors (+4.3%), followed by Germany with 5.7 million (−1.1%) and France with over 5.6 million (+1.0%).

Export orders declined for the first time in five months, and overall manufacturing output grew at a slower pace. Longer supplier delivery times continued to signal supply-chain disruptions but nonetheless made a positive contribution to the headline PMI. Backlogs of work saw their steepest drop so far this year, while both employment and purchasing activity softened. At the same time, input cost pressures eased, even as business confidence worsened.

A PMI value above 50 typically signals growth in the manufacturing sector, and the unchanged figure suggests that conditions have neither accelerated nor deteriorated compared with the prior month. For investors and policymakers, the flat reading may point to a manufacturing landscape that has found a near-term equilibrium, as firms continue to navigate broader global and domestic economic conditions.

The stability of the index could be interpreted as a cautiously positive sign for Europe’s largest economy, signaling resilience in German industry even as external demand, supply chain dynamics and interest rate environments continue to shape the outlook for the coming months.

Despite the recent pullback, overseas investors remained net buyers of $3.9 billion in FAR-eligible bonds between June 1 and July 31. Market participants also turned their attention to this week’s Reserve Bank of India policy meeting, where economists widely expect rates to remain on hold, while watching closely for the central bank’s assessment of inflation risks stemming from higher oil prices and a weak monsoon.

Even so, new orders continued to be underpinned by foreign demand, with new export sales rising at their fastest pace since August 2021. At the same time, pressure on balance sheets reportedly prompted firms to curb growth in input purchases and pre-production inventories, and also contributed to a renewed fall in employment.

Backlogs of work continued to build at a solid rate as supply chain pressures persisted, although the intensity of these pressures eased somewhat.

On the cost side, both input cost and output price inflation slowed in July but remained high by historical standards, as prices for key inputs such as metals and chemicals continued to rise sharply. Business confidence slipped to a three-month low but stayed elevated in historical terms.

The indicator, which had stood exactly at the 50.0 mark in July 2026 — signaling a flat performance between expansion and contraction — has now slipped just below that threshold. While the decline to 49.8 is marginal, it suggests a slight weakening in operating conditions for French manufacturers after a period of stagnation.

The latest reading, updated on 3 August 2026, will be closely watched by investors and policymakers as they assess whether this minor pullback is a temporary pause or an early sign of renewed pressure on France’s industrial outlook.

The latest reading, updated on 3 August 2026, still places the index above the 50-point threshold that separates expansion from contraction, indicating that Italian manufacturing continues to grow, albeit at a slower pace than in the previous month. The moderation from June’s 52.2 suggests a cooling in the pace of output and new orders after a stronger start to the summer.

The July 2026 figures will be closely watched by investors and policymakers looking for signs of how resilient Italy’s industrial base is amid shifting global demand and broader European economic conditions. While growth remains in positive territory, the downward move highlights emerging headwinds for the country’s manufacturers as the third quarter begins.

The fall in oil prices prompted money markets to slightly pare back expectations for additional tightening by the European Central Bank, although a rate increase by September remains largely priced in. At the same time, stronger-than-expected eurozone data continued to underpin the policy outlook. The bloc’s economy grew 0.4% in the second quarter, beating forecasts of 0.2% and marking its fastest pace of expansion since early 2025. Meanwhile, annual inflation accelerated to 2.9% in July, with both core and services inflation also firming.