Europe
The clearest macro takeaway is that parts of southern Europe’s economy remain firm, but the region is still vulnerable to external shocks. Spain’s record employment gain suggests household demand and services activity have held up, yet the sharp fall in foreign investment points to weaker confidence in the country’s medium-term capital story.
Spain’s Social Security enrolment reached an all-time high in March after more than 211,000 jobs were added, helped by Easter Week, while unemployment edged lower. That strengthens the case that the labour market is still supporting growth, even if some of the boost reflects seasonal hiring in tourism and related services.
But that strength was offset by weaker investment data. Official figures showed foreign direct investment in Spain fell by 21.8% in 2025 to €30.764 billion, the lowest level since 2021, despite expectations that European funds would help attract capital. That suggests investors remain cautious about the broader business environment even as domestic activity proves resilient.
Elsewhere, the economic effects of higher energy prices are becoming more visible. The Felix Project said it is feeling the strain from increased costs tied to the conflict involving Iran, while tourism operators said a promising start to the year has been put at risk by the uncertainty, even if some opportunities have also emerged.
The shipping story reinforces that point. A French-owned vessel appears to have become the first ship owned by a major European firm to pass through the Strait of Hormuz since the conflict began, highlighting both the persistence of trade flows and the sensitivity of Europe’s economy to energy and transport disruptions. Separately, the continued spread of remote working is supporting activity in coastal towns, showing how structural shifts in where people live and spend are still reshaping local economies.
Together, these developments matter because they point to a Europe facing two competing forces: resilient employment and shifting regional demand on one side, and geopolitical pressure on energy, transport and investor confidence on the other. For growth and markets, that mix supports near-term activity but raises the risk of stickier inflation and a more complicated policy backdrop if external costs rise further or investment remains subdued.