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[INTRO: AMINE LAOUEDJ, MANAGING DIRECTOR]
Welcome. Each week from London, we break down the key global economic event that shaped the past seven days, and we analyze what it means for business.
[LAST WEEK'S KEY ECONOMIC EVENT]
On Wednesday, we got a fresh batch of business surveys from S&P, and their results tell a very clear story: The war in the Middle East is splitting the global economy in two different directions.
S&P is a financial data company. Every month, they survey thousands of business executives across major economies, asking whether their activity is growing or shrinking. They compile each country's answers into a number called the Purchasing Managers' Index, or PMI. Above 50 means growth. Below 50 means trouble. The results published on Wednesday are early estimates, and the fastest signal we have to see what is happening on the ground right now.
Let’s start with Europe.
The Eurozone composite PMI fell to 48.6, the first time it has been below 50 in 16 months. The index combines two different sectors: services and manufacturing, and the drop was driven almost entirely by services. This sector includes everything from local restaurants to major consulting firms.
In the Eurozone, services make up 65 percent of the economy. When that number drops, the whole engine starts to stall. Germany and France are both in the red, meaning the two largest economies in Europe are shrinking in their most important sector.
However, manufacturing moved in the opposite direction, rising to 52.2.
This creates a strange paradox: factories look busy, but the broader economy is shrinking. The S&P Global report noted that new orders continued to decline even as output rose. This points to precautionary stockpiling rather than genuine demand. Companies are building inventory because they fear supply disruptions and higher prices. This is a defensive reaction to the war, and it makes the economic numbers look better than they really are.
On a separate note, prices are rising fast.
Output prices rose at their fastest rate in two years, input costs hit an 11-month high, and shipping times are also getting worse because of the disruptions in the Strait of Hormuz.
Consequently, the Eurozone is showing early signs of stagflation, the difficult scenario where the economy shrinks while prices rise at the same time. There is no easy fix for a central bank. Cutting interest rates makes inflation worse, but raising rates deepens the contraction.
The European Central Bank meets next Wednesday, April 29, and this data is waiting for them on the table.
Now, let us look at the US and the UK. Both came in at 52, both beat expectations, but their situations are very different.
The US is genuinely shielded because it produces most of its own oil and gas, which means the energy shock hits with much less force.
The UK is also in a stronger position than continental Europe, thanks to domestic North Sea production and Norwegian pipeline gas, but it is not in the same category as the US. UK input costs rose at their fastest pace in the survey's 28-year history, with 69 percent of manufacturers reporting higher costs. The UK is still growing, but those record cost pressures suggest the shield has limits.
Now, regarding oil prices. This week, Brent crude shot up to 105 dollars a barrel. That is a 10 percent jump in just five days, and oil is now 55 percent more expensive than it was before the war started.
Europe will always be more exposed to this kind of shock than the US. It comes down to where they get their energy. That vulnerability is structural. Whether the shock persists depends on the war.
[WHAT IT MEANS FOR BUSINESS]
So, what does this mean for business?
The impact depends entirely on where you are.
European service businesses are the most exposed.
The energy shock is no longer just raising their costs: it is now shrinking their revenues. The logic is simple. High energy costs raise the price of everything from electricity to shipping. Businesses must either absorb that cost and lose their margin, or raise prices and lose their customers. In Europe, demand is already falling, which means businesses are getting squeezed from both sides.
European manufacturers also face a misleading situation. Their order books are full because of temporary stockpiling, not real demand. When that cycle ends, those orders will drop.
US businesses are in the strongest position, with both growing demand and energy insulation working in their favour. They can pass higher costs to their customers without losing volume.
UK businesses sit in the middle: their demand is holding, but their cost pressure looks more like Europe than America.
For companies exporting from the US or UK into Europe, this is an advantage. You have lower relative costs while your competitors are weakening.
In Asia, India hit 58.3, the strongest reading of any major economy. It reflects the massive momentum of the Indian domestic market, but India imports over 80 percent of its crude oil. The big question is how long their demand can outrun imported energy inflation.
In Japan, manufacturing is at a 12-year high, but because Japan imports nearly all of its energy, that cost pressure will compound over time.
[WHAT SHOULD BUSINESS LEADERS DO NOW]
So, what to do now?
If you are operating in Europe, the priority is survival.
You must stress-test your costs against oil at 110 to 120 dollars a barrel, because the current price of 105 already assumes diplomatic progress that has not happened. Lock in energy contracts now. Cut discretionary spending before you are forced to cut the essentials.
If you run consumer-facing services, prepare for lower utilization through the summer. And do not expand capacity based on current manufacturing orders. Those orders are inflated by stockpiling and they will normalize.
For businesses in the US, the UK, or domestic markets in Asia, there is an opportunity to go on the offensive, but size your bets to the divergence lasting, not to it being permanent.
If you compete with European companies in third markets, take their share now through better pricing or reliability.
If you source from Europe, renegotiate your terms. Your European suppliers need your business more than they did three months ago.
And if you are considering mergers and acquisitions in Europe, valuation multiples are compressing in the sectors most exposed to this squeeze, particularly energy-intensive manufacturing and consumer-facing services.
[OUTRO: AMINE LAOUEDJ, MANAGING DIRECTOR]
Thank you for listening to this episode of What It Means for Business. Have a good week.
The Purchasing Managers' Index (PMI) is an economic indicator derived from monthly surveys sent by S&P Global to thousands of business executives. As the conflict in the Middle East continues, the latest data reveals a global economy moving in two different directions: the Eurozone sliding toward stagflation, while the US and UK utilize domestic energy advantages to maintain growth.
Every week on the What It Means for Business podcast, Glenshore’s Amine Laouedj cuts through the noise of global economic headlines to explain the mechanics behind the data and deliver the specific, actionable insights business leaders need to adapt to a changing world and protect their margins.
Date of production: 27 April 2026
Disclaimer: This material is produced by Glenshore, the boutique investment bank headquartered in London, specializing in cross-border M&A and strategic advisory. The analysis contained in this material reflects publicly available information as of the date of publication, sourced from official filings, academic literature, and verified secondary sources. No proprietary or non-public data has been used. The views expressed are those of Glenshore and are provided solely for informational and educational purposes. They do not constitute investment or financial advice and should not be interpreted as a recommendation to take any particular action. This material may contain forward-looking statements. Past performance is not indicative of future results. Glenshore makes no representations or warranties regarding the accuracy or completeness of this information and disclaims any liability arising from reliance upon it for any purpose. Any third-party names, trademarks, or logos referenced in this material are the property of their respective owners and are used strictly for identification purposes. This material may not be copied, distributed, published, or reproduced in whole or in part without the express written consent of Glenshore.
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