Key insights
- European auto sector growth leads in March, a first since 2020, driven by strong production. Overall European sector performance weakened, with fewer sectors expanding and demand deteriorating. Rising input costs and output prices are widespread, with transportation experiencing the most significant increases. Weakening demand and rising costs in Europe could signal headwinds for global manufacturers, including those with US exposure.
Investing.com -- The Automobiles & Auto Parts sector topped European growth rankings in March for the first time since December 2020, according to S&P Global Europe Sector PMI data released Tuesday.
The sector recorded a strong production increase, marking its fastest rate since March 2023. This performance pushed it to the top position among 19 monitored segments.
Overall European sector performance weakened in March, with only 11 of 19 segments recording output expansion, down from 15 in February. This represents the lowest number in 2026 so far.
Tourism & Recreation fell to the bottom of the rankings, with business activity declining at a steep rate at the end of the first quarter. Media, another consumer services sector, showed only a fractional rise in output.
Demand conditions deteriorated across multiple sectors. Four segments recorded fresh contractions in new orders during March: Tourism & Recreation, Banks, Other Financials and Real Estate. Only nine sectors saw new sales rise during the month, the lowest number since November 2025.
All 19 sectors registered increased cost burdens at the end of the first quarter, continuing a trend throughout 2026. Of these, 17 segments saw input price inflation accelerate. Media and Real Estate were exceptions, though both showed rates above their long-run averages.
Nearly all sectors raised output charges in March, with Other Financials being the only exception, showing a marginal drop in selling prices. At 18, the number of sectors increasing output prices was the highest since February 2023.
Transportation registered the most marked increases in both input costs and output prices.
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