Main Findings from the ECB's Recent Contacts with Non-Financial Companies (European Central Bank)

Summary

• ECB staff held exchanges with representatives of 64 leading non-financial companies operating in the euro area, mainly between 28 September and 7 October 2026.§1
• Contacts reported ongoing moderate growth in activity in the third quarter and unchanged momentum in the fourth quarter.§1
• Wage growth is expected to slow from 3.2% in 2025 to 3.0% in 2026 and 2.9% in 2027.§3
• Around 40% of contacts thought the inflation uptick caused by the conflict in the Middle East would result, or risked resulting, in higher wage demands, up from 20% in the previous survey round.§3
• Around 40% of contacts said activity in their sector had decreased because of the Middle East conflict, while 20% said it had increased.§3
• Almost 80% of contacts said that costs had risen as a result of the Middle East conflict.§3

Key insights

1. Activity in manufacturing was uneven, with a very strong rise in demand for high value-added electronics, electrical equipment and related machinery.§1
2. Construction and real estate activity were losing momentum, and retail trade remained relatively subdued.§1
3. Business investment growth was increasingly driven by AI, electrification, defence and aerospace.§2
4. The steel industry was starting to benefit from stricter import quotas and tariffs applied since 1 July 2026.§2
5. Food, chemicals, textiles, pulp and paper continued to face weak demand amid high energy, labour and regulatory costs.§2
6. Wage growth is expected to slow from 3.2% in 2025 to 3.0% in 2026 and 2.9% in 2027, a milder deceleration than in previous survey rounds.§3
7. The share of contacts expecting higher wage demands from the conflict-related inflation uptick rose to around 40% from 20%.§3