IDEAS home Printed from https://ideas.repec.org/a/ecb/ecbbox/202500063.html
   My bibliography  Save this article

Manufacturing versus services: how frontloading and uncertainty shaped recent developments

Author

Listed:
  • Battistini, Niccolò
  • Gareis, Johannes

Abstract

Manufacturing activity in the euro area rebounded in early 2025, while services activity slowed, marking a reversal of the trends observed in the previous two years. This box analyses the role of frontloading effects and trade policy uncertainty in driving recent production dynamics. It argues that manufacturing benefited temporarily from frontloading ahead of US tariff measures, while services were more directly affected by rising trade policy uncertainty. In particular, hard data reveal that manufacturing subsectors with higher exposure to the United States (e.g. pharmaceuticals) exhibited larger fluctuations around the April tariff announcements. Moreover, survey data indicate that business services, which are closely linked to business investment, have been more sensitive to uncertainty than consumer services. Looking ahead, if trade policy uncertainty were to remain high, it could continue to weigh on services and more visibly affect manufacturing as frontloading effects fade, yet the recent EU US trade agreement is expected to reduce uncertainty. JEL Classification: E23, E27, E32

Suggested Citation

  • Battistini, Niccolò & Gareis, Johannes, 2025. "Manufacturing versus services: how frontloading and uncertainty shaped recent developments," Economic Bulletin Boxes, European Central Bank, vol. 6.
    • Handle: RePEc:ecb:ecbbox:2025:0006:3
    as

    Download full text from publisher

    File URL: https://www.ecb.europa.eu//press/economic-bulletin/focus/2025/html/ecb.ebbox202506_03~ee425f3792.en.html
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecb:ecbbox:2025:0006:3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Official Publications (email available below). General contact details of provider: https://edirc.repec.org/data/emieude.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.