Eurozone Business Activity Stalls in April Led by Fall-off in Services

Brussels, 23 Apr (ONA) --- Eurozone business activity has stalled this month, a top industry survey showed today, led by the contraction in the bloc's dominant services industry and as the prolonged downturn in manufacturing continued.

HCOB's preliminary composite eurozone Purchasing Managers' Index (PMI), compiled by S&P Global, dropped to 50.1 this month from March's 50.9. It was barely above the 50 mark separating growth from contraction and short of the median estimate for 50.3 in a Reuters poll.

A PMI covering services sank to 49.7 from 51.0, missing the poll estimate for a more modest decline to 50.5.

Optimism among services firms plummeted with the business outlook index falling to 53.1 from 57.8, the lowest since mid-2020 when the COVID-19 pandemic was tightening its grip on the world.

Manufacturing activity, in decline for nearly three years, saw some improvement. The sector's PMI rose to a 27-month high of 48.7 from 48.6, confounding expectations in the Reuters poll for a decline to 47.5.

An index measuring output, which feeds into the composite PMI, jumped to 51.2 from 50.5, its highest in almost three years.

Firms have suffered from uncertainty as U.S. President Donald Trump flip-flops on his tariff policy.

But some of the activity was from factories completing past orders. The backlogs of work index dropped to a three-month low of 46.8 from 47.7.

As overall demand fell again, firms returned to reducing headcount. The composite employment index dipped to 49.9 after being just above breakeven at 50.4 in March.

--- Ends/Khalid