Five months into the Iran war, manufacturing surveys released in early August 2026 reveal a critical situation for the global industrial sector. China’s manufacturing activity contracted in July due to weaker external demand and rising raw material costs linked to the Middle East conflict. In Europe, chemical and steel producers have applied surcharges of up to 30% on their products. The Strait of Hormuz, through which roughly a fifth of the world’s oil passes, remains the main pressure point, with energy prices rising since the conflict began. Economists are now warning of a risk of deindustrialization in parts of Europe.
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