The industrial data in the Eurozone shows divergence, with the defense industry emerging as a stable pillar.
In July 2026, the growth rate of manufacturing output in the Eurozone reached its highest level in nearly four and a half years: the manufacturing Purchasing Managers' Index rose from 51.4 to 51.9, while the actual production index increased from 51.7 to 52.9, hitting a peak since March 2022.
However, these figures do not indicate a comprehensive industrial recovery: companies boosted production mainly by fulfilling backlog orders, with only marginal growth in new orders, overseas export demand declining again, and manufacturing employment continuing to shrink. Under this context, the defense industry has become one of the few sectors capable of consistently driving production capacity.
Government procurement orders for radar systems, armored vehicles, ammunition, air defense systems, missiles, and military aircraft not only support major defense conglomerates but also drive upstream and downstream supply chains including metals, electronics, chemicals, cables, and specialized equipment.
- Germany's Hensoldt Company doubled its new order volume in the first half of 2026, reaching €2.812 billion, with backlog orders totaling €10.356 billion;
- The Franco-German joint defense company KNDS holds total backlogged orders of approximately €33.1 billion, sufficient to sustain years of full-capacity production.
Original article: toutiao.com/article/1873017526696967/
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