Berenberg Sees "Dark Clouds" on The Eurozone Horizon After PMIs

07:47 AM EDT, 03/24/2026 (MT Newswires) -- Although the European Purchasing Managers' Index (PMI) remained above the 50-point threshold, which separates growth from contraction, for a fifteenth consecutive month in March, the negative effect of the Iran war is clearly visible, said Berenberg after Tuesday's figures.

The eurozone PMI survey indicated that output growth almost stalled, with the composite index falling from 51.9 points in February to 50.5 points in March, noted the bank.

Input prices rose at the fastest rate in just over three years, and manufacturers report supply chain disruptions and significantly longer delivery times, largely linked to shipping issues.

As in France and Germany, the slowdown in growth in the eurozone was driven by the services sector, while the manufacturing PMIs rose slightly, stated Bernberg.

However, the longer the war in Iran continues, the higher energy prices and inflation will rise, and the worse the economic outlook will become, added the bank.

Extensive fiscal spending in the eurozone on defense and, in Germany, on infrastructure will continue to support the manufacturing sector. However, this boost will be outweighed by the war in Iran should it continue.

Companies seem to be fully aware of this, according to Berenberg. Business confidence in the eurozone fell sharply in March, reaching its lowest point in almost a year. This was the largest monthly drop in sentiment since the Russian invasion of Ukraine in early 2022.

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