The European Central Bank has published a summary of recent staff contacts with 67 leading non-financial companies in the euro area, based mainly on exchanges between 23 March and 1 April 2026. The contacts pointed to good business momentum in the first quarter, with few signs at that stage that demand had reacted to the war in the Middle East. Growth was still led by services, while manufacturing and construction were also picking up. Consumer spending was described as steady but expected to soften in coming months, and the outlook for investment continued to improve on the back of order intake, including strong demand linked to artificial intelligence and defence. Employment was broadly stable, with modest expansion across most services sectors and continued but easing contraction in much of industry. Before the outbreak of war in the Middle East, selling price growth had remained moderate, but the March jump in oil prices was already being passed through quickly in oil-dependent sectors such as air travel, logistics, chemicals, plastics and packaging, in some cases through double-digit price increases. Contacts said a prolonged conflict could trigger wider supply disruptions and stronger inflation pressure while also weakening demand. Wage growth expectations nevertheless continued to moderate overall, with contacts implying growth of 3.5 percent in 2025, 2.9 percent in 2026 and 2.8 percent in 2027, although some respondents saw the conflict as an upside risk to the 2027 outlook.
European Central Bank 2026-05-04
European Central Bank summarises company contacts showing solid first quarter activity and wage growth slowing to 2.9 percent in 2026
The European Central Bank published a summary of staff contacts with 67 leading euro area non-financial companies, indicating solid first-quarter business momentum led by services, with manufacturing and construction also improving and investment supported by strong artificial intelligence and defence-related demand. Contacts reported broadly stable employment, steady but expected-to-soften consumer spending, and moderate selling price growth before the Middle East war, with the subsequent oil price spike feeding into double-digit increases in oil-intensive sectors. Wage growth expectations moderated to 3.5 percent in 2025, 2.9 percent in 2026 and 2.8 percent in 2027, though a prolonged conflict was seen as a risk to inflation and demand.