European industry will end 2025 in almost constant recession.

BarcelonaManufacturing activity in the eurozone worsened last December, ending 2025 in a near-constant recession, according to Purchasing Managers' Index (PMI) data compiled by S&P Global. The index closed December at 48.8 points, eight-tenths of a point below the previous month's level, the worst figure since March. This index, a key international indicator of economic activity by sector, signals expansion when it is above 50 and contraction when it is below. Although some analysts suggested that 2025 could be a year of recovery for industrial activity in Europe, the data have ultimately confirmed the opposite. "Demand for manufactured goods in the eurozone is slowing again," said Cyrus de Rubia, chief economist at Germany's Harmburg Commercial Bank, in comments reported by EFE. "It's not surprising that companies continue to cut staff in this environment," he added. Germany, the continent's industrial and export powerhouse, closed December with a manufacturing PMI of 47 points, its worst figure in ten months, while Spain stood at 49.6 points, its lowest in eight months. Italy also fell below 50 points, with 47.9, but at the other end of the spectrum, France and the Netherlands closed the last month of the year with 51.1 and 50.7 points respectively. In France's case, this is the highest figure in the last three and a half years. Looking ahead to 2026, however, the situation shows no signs of changing, at least in the short term: "Companies don't seem capable or willing to generate momentum; instead, they are acting cautiously, which is hurting the economy," says De la Rubia. However, the significant fiscal stimulus approved by the German government, which will be heavily focused on infrastructure improvements and aid for industry and innovation, could be a driving force in the coming months, not only in Germany but also across Europe, given that much of the industry in the eastern and southern European Union states is German-owned. Since the post-pandemic recovery, European industry has suffered several difficult years due to logistical and supply problems, rising raw material costs, and the energy crisis stemming from the Russian invasion of Ukraine, which drove up the cost of oil, electricity, and natural gas. More recently, the trade war initiated by US President Donald Trump, trade tensions with China, and the entry of Chinese electric vehicles into the European market have decimated many subsectors.

Industrial recovery in China

In China, the world's other industrial giant alongside the EU, industrial activity rebounded in December after eight consecutive months of decline, according to data released last Wednesday by the government's statistics office. The Asian country's PMI indicator rose 0.9 points compared to November, reaching 50.1 points, driven primarily by improved expectations regarding production, new orders, and delivery times. In a statement, Huo Lihui, spokesperson for the government statistics office, emphasized that the PMI data shows a "clear expansion" in both supply and demand in China's manufacturing sector.