Eurozone Posts Month-on-Month Growth in 2025, But December’s Pace Slows
Growth hits a speed bump as the year closes.
The Eurozone's economic engine kept humming along in 2025, notching consistent gains month after month. The trend was clear, positive, and welcomed by markets starved for good news. But as the calendar turned to its final page, the momentum began to fade.
December's Slowdown
The last month of the year told a different story. The expansion didn't stop, but it definitely lost a step. That deceleration throws a question mark over what comes next—is this a temporary breather or the start of a more concerning trend? Analysts are now parsing the data, looking for clues in consumer spending and industrial output that might signal the path for 2026.
For the crypto world, it's another reminder. Traditional finance moves in slow, lumbering cycles, often caught flat-footed by its own lagging indicators. Digital assets, by contrast, price in global sentiment in real-time—no waiting for quarterly revisions from a central bank. One system reports history; the other trades the future.
Services kept it going, but factories pulled back
Factories had a rough year. Manufacturing activity shrank again in December, while services managed to keep growing, though not as strongly. The services activity index dropped to 52.4, down from 53.6 the month before.
That dip shows people were still spending, just not at the same pace. Meanwhile, factory orders fell faster. It was the fifth month in a row that total new business went up, but it was also the weakest reading since September.
Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said the growth likely sped up overall during the quarter.
Looking ahead, Cyrus said the service sector should stay steady in 2026, while manufacturing might get a lift from more demand for construction equipment and military hardware. “As a result, economic growth of well over 1% should be possible again, but is certainly not overwhelming,” he said.
Spain was the only bright spot. Its composite reading climbed to a two-month high. Germany didn’t fare as well, slowing to a four-month low. Italy barely scraped together any growth. France? Nothing. Its private sector activity flatlined in December.
Prices rise again, central bank holds off on cuts
Things got more expensive last month. Input costs across the Eurozone ROSE at the fastest rate in nine months. The price jump hit both factories and service businesses. But selling prices didn’t change much.
Cyrus said that was probably why the European Central Bank didn’t go ahead with another rate cut in December. “Cost inflation in this sector rose again,” he said, “and that’s the most important reason why the ECB has not implemented any further interest rate cuts and does not appear to be planning any.”
Job numbers ticked up a bit, but the gain was small. Manufacturing layoffs continued, and they held back bigger improvements in hiring across the region.
Markets ended the year mixed. Switzerland’s SMI dropped 0.27% to 13,210.98. Finland’s HEX added 0.53%, closing at 12,483.02. Spain’s IBEX 35 climbed 0.24%. Germany’s DAX nudged up 0.14%. France’s CAC slipped 0.4%. Italy’s FTSE MIB gained 0.36%. The broader STOXX 600 edged up 0.17% to 602.78.
Currencies stayed mostly quiet. The euro lost ground against the dollar, landing at 1.171. It dropped slightly against the yen, settled at 183.12, and held steady against the pound at 0.866.
Bond yields fell across the board. Germany’s 10-year closed at 2.851%, Italy’s at 3.505%, and France’s at 3.562%. That wrapped up a long, uneven year where the Eurozone stayed afloat thanks to services, while factories kept falling behind.
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