GLOBAL ECONOMY European Factory Activity Ends 2025 In Deeper Contraction But Asia Shines on Improved Demand

Dubai Electricity and Water Authority (DEWA) has been granted a UAE patent for a Feeder Input-Output Simulator for Substation Automation Applications.

This achievement reflects its commitment to adopting advanced engineering solutions to elevate electricity transmission system performance, boost efficiency and reduce operational costs.

The innovation, now in active use within DEWA's Power Transmission Division, serves as a pivotal tool for the safe and precise testing of complex automation systems. It reinforces grid reliability and supports digital and smart transformation in the energy sector.

Saeed Mohammed Al Tayer, MD & CEO of DEWA, said, "This technology reflects the wise leadership's vision to promote innovation that shapes a more prosperous and sustainable future for our nation. It embodies DEWA's approach to turning applied innovation into tangible solutions that strengthen the resilience and sustainability of our energy infrastructure. The simulator underscores the ingenuity of our Emirati staff in developing advanced tools that enable the safe and efficient testing of substation automation systems while accelerating project completion, reducing costs and enhancing safety standards."

The simulator is used to test substation automation systems within a secure virtual environment. It simulates actual electrical equipment, including switches and relays, and transmits virtual signals to associated real controllers. This enables the safe testing of multiple operating scenarios and the verification of control system performance with high accuracy. It eliminates the need to handle live electrical current or shut down substations, ensuring system readiness and reliability before field implementation.

The innovation has already delivered tangible results, including lower testing and operational costs, faster task execution and reduced operational risks. These improvements reinforce the reliability of the electricity network and support service continuity in line with the highest international standards.

Hussain Lootah, Executive Vice President of Transmission Power at DEWA, said, "This device is a significant addition to the tools used by the Power Transmission Division, as it provides a safe and effective environment for testing substation automation systems. It enhances the efficiency of work teams and accelerates task completion without compromising network safety."

This achievement underscores DEWA's commitment to fostering organisational innovation and investing in practical, employee-led technical solutions. It reinforces DEWA's leadership in the energy sector and supports the provision of reliable, safe and sustainable services that align with Dubai's ambitions and the needs of society.

Source: TradingView

President Donald Trump said Friday that if Iran "violently" intervenes with peaceful protests, then the U.S. will "come to their rescue."

Unrest has been growing in Iran since last week, as protests erupted over the government's handling of a sharp fall in the nation's currency and soaring prices. Annual inflation hit 42.2% in December, with food prices jumping 72%. The protests turned violent this week as local media reported the death of at least six civilians.

"If Iran shots and violently kills peaceful protesters, which is their custom, the United States of America will come to their rescue," Trump wrote in a post on Truth Social on Friday.

"We are locked and loaded and ready to go," he added.

Iran's supreme leader adviser Ali Larijani responded by saying that U.S. interference in Iran's protests was equivalent to chaos across the entire region on Friday, in comments reported by Reuters.

Iran's economy has struggled since Trump pulled the U.S. out of the Iranian nuclear deal in 2018 and re-imposed sanctions on the country. Last year in June, U.S. strikes on Iranian nuclear sites escalated tensions, pulling Washington into Israel's war with its longtime regional rival.

Suzanne Maloney, vice president and director of foreign policy at the Brookings Institution, previously said that the Iranian people were calling for not just a fix to the economy, but for regime change. She added that Iran's Supreme Leader Ayatollah Ali Khamenei has been in power for 36 years.

"We're hearing cries of Death to the dictator. We're hearing slogans that juxtapose the regime's support for militia groups across the region with the real interests and demands of the Iranian people," Maloney told CNBC's "Squawk Box" on Wednesday.

Source: CNBC

Germany's manufacturing sector faced a deepening downturn at the end of 2025, with output declining for the first time in 10 months in December amid a sustained drop in demand, a business survey showed on Friday.

The HCOB final Purchasing Managers' Index (PMI) for German manufacturing, compiled by S&P Global, fell to 47.0 in December from 48.2 in November, a bigger decline than the preliminary reading of 47.7 for the final month of the year.

Readings below 50.0 indicate contraction while those above point to growth.

The decline was largely driven by a sharp fall in export sales, which have now decreased for five consecutive months, with the rate of decline accelerating to its fastest since December 2024.

"Manufacturing had shown hints of recovery earlier in 2025, but the downturn has deepened again in December, driven by investment and consumer goods," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank AG.

The survey highlighted a challenging environment for German manufacturers, with employment, purchasing activity and stocks of inputs all seeing deeper cuts.

Workforce numbers fell at the steepest rate in six months.

However, manufacturers remained optimistic about future production, with expectations reaching a six-month high.

Firms expressed hopes for a demand boost from new products and increased defence and infrastructure spending.

"With the start of government-backed infrastructure projects and the booming demand for defence equipment, things could look different in 2026," de la Rubia said.

Source: Theedgemarkets

Euro zone factory activity retreated further into contraction territory in December as production decreased for the first time in 10 months, dampened by accelerating declines in new orders, a survey showed on Tuesday.

The HCOB Eurozone Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, fell to 48.8 in December from 49.6 in November, marking its lowest reading in nine months and lower than a preliminary estimate of 49.2.

Readings above 50.0 indicate growth in activity, while those below that point to contraction.

"Demand for manufactured products from the euro zone is slowing down again. Significantly fewer orders, declining order backlogs, and continued inventory reduction are the most obvious indicators of this," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.

"Companies seem neither able nor willing to build momentum for the coming year, but are instead exercising caution, which is poison for the economy."

The output subindex dropped to 48.9 from November's 50.4, marking its first contraction since February.

New orders fell at the quickest pace in almost a year, with export demand decreasing at the fastest rate in 11 months.

Germany, the bloc's largest economy, recorded the weakest performance among the eight nations monitored with the PMI reading hitting a 10-month low. Italy and Spain also slipped back into contraction territory.

France provided a rare bright spot, with its manufacturing PMI jumping to a 42-month high.

Supply chain pressures re-emerged for factories, with vendor delivery times increasing to the longest since October 2022. This contributed to input cost inflation accelerating to a 16-month high.

Factories, however, continued to discount their goods prices for the seventh time in eight months as they struggled to stimulate demand.

Weak demand led factories to shed jobs for the 31st consecutive month.

"Overall, it will not be easy for the manufacturing sector of the euro zone to gain a foothold in 2026. However, expansionary fiscal policy could help," de la Rubia added.

Despite current challenges, manufacturers' optimism about the year ahead improved to its highest level since February 2022, just before Russia invaded Ukraine.

Source: Investing

UK manufacturing output grew for a second consecutive month in December, according to a closely watched survey suggesting the sector is shaking off pre-budget fears of potential tax rises and the impact of the Jaguar Land Rover shutdown.

S&P Global said its manufacturing purchasing managers' index increased to 50.6, up from 50.2 the month before. While the reading was below a preliminary estimate of 51.2 announced in mid-December, it was still the highest in 15 months.

The index increased for a third month in a row, registering a reading above 50 — which indicates growth — for the second straight month. After new orders stood still in November, firms reported an increase for the first time since September 2024, driven by consumer goods producers. Output rose across all sectors concurrently for the first time since August 2024.

"UK manufacturers benefited from several reduced headwinds towards the end of the year, as the negative impacts of the uncertainty surrounding the autumn budget, tariffs and the JLR cyber-attack all moderated," Rob Dobson, director at S&P Global Market Intelligence, said.

In the run-up to Chancellor of the Exchequer Rachel Reeves' Nov. 26 budget, businesses held off on making investment decisions amid concern about potential tax rises after her first budget a year earlier raised levies by £40 billion a year, with the burden mainly hitting companies.

While the sector was supported by domestic buyers, overseas orders continued to fall for a forty-seventh month. Firms reported some signs that demand from the US and the Middle East is recovering after the shock sparked by US President Donald Trump's tariff war.

Production in December was boosted by efforts to build up stocks of finished goods and clear order backlogs, the survey also showed.

However, there are some early signs that manufacturers are questioning whether the current boost will extend into 2026. S&P's business optimism indicator fell for the first time in three months in December due to fears that spending by firms and consumers will remain subdued and amid an increase in price pressures.

"The start of 2026 will show if growth can be sustained after these temporary boosts subside," Dobson said.

Source: Bloomberg Europe

UK house prices unexpectedly fell in December, according to a top mortgage lender, in a sign that the property market may have been affected by Labour's tax-hiking budget.

Nationwide Building Society said the average price of a home was down 0.4% to £271,068 ($365,000), declining for the first time in four months. It reversed November's 0.3% increase and defied analysts' expectations of a 0.1% gain to end the year.

Chancellor of the Exchequer Rachel Reeves' budget on Nov. 26 lifted taxes by £26 billion and announced a new levy on homes worth more than £2 million. These make up a small fraction of the UK's total housing stock, yet confidence remains subdued across the market.

The Bank of England's decision to cut interest rates to 3.75%, the lowest since 2023, in December will provide some support to homebuyers. However, affordability is likely to remain stretched as the BOE said it is nearing the end of the easing cycle.

Source: Bloomberg Europe