Eurozone Private Sector Shrinks For First Time Since 2024

(RTTNews) - Euro area private sector contracted for the first time in nearly one-and-a--half years as the ongoing war in the Middle East acted as a drag on services activity, final results of the purchasing managers' survey by S&P Global showed on Wednesday.

The composite output index fell to 48.8 in April from 50.7 in the previous month. The reading was moderately above the flash estimate of 48.6.

The score below the 50-threshold signaled the first contraction in the private sector since December 2024.

"The final eurozone PMI data confirm the earlier signs of an economy slipping into decline during April as the ongoing war in the Middle East derails the recovery that had been building prior to the outbreak of the conflict," S&P Global Market Intelligence Chief Business Economist Chris Williamson said.

"Although indicative of only a modest 0.1 percent quarterly GDP decline so far, the absence of any signs of the crisis easing any time soon suggests that the downturn may soon deepen," Williamson added.

The decrease in business activity was entirely reflective of the contraction in the service sector, which was the fastest in over five years, and more than offset a stronger increase in manufacturing production, the PMI survey showed.

The services Purchasing Managers' Index dropped to 47.6 in April from 50.2 in March. The score suggested the fastest contraction in output since February 2021 but remained above the initial score of 47.4.

The survey showed that private sector activity in Germany and France fell at faster rates while Spain contracted for the first time in more than two years. In contrast, Italy's private sector returned to growth.

Germany's private sector slipped into contraction for the first time in almost a year. The composite output index dropped to 48.4 in April from 51.9 in the previous month. The flash score was 48.3.

At 46.9, the services PMI matched the flash estimate but dropped from the prior month's 50.9, signaling the fastest decline in activity since November 2022.

France's private sector activity declined at the fastest pace in 14 months in April. The final composite index fell to 47.6, as initially estimated, from 48.8 in March.

The services PMI declined to 46.5 in April, as estimated, from 48.8 in the prior month. This was the lowest reading since February 2025.

Spain's private sector shrank for the first time in nearly two-and-a-half years in April. The composite output index slid to 48.7 from 52.4 in March. The services PMI recorded 47.9 compared to March's 53.3.

On the other hand, Italy's private sector returned to the expansion territory in April underpinned by the manufacturing sector. The composite output index rose to 50.5 from 49.2 in the prior month. The services PMI registered 49.8 compared to 48.8 in March.