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Eurozone Economy Contracts: Services PMI Falls to 62-Month Low
(MENAFN) The eurozone's services sector suffered its steepest contraction in over five years last month, as a closely watched business activity gauge plunged to a multi-year low, fresh data from S&P Global revealed Wednesday.
The eurozone services Purchasing Managers' Index slid to 47.6 in April, a sharp deterioration from March's 50.2 reading — breaching the critical 50-point threshold that separates growth from contraction and hitting its weakest mark in 62 months. The broader composite PMI, which captures activity across both manufacturing and services, retreated to 48.8 from 50.7, notching its lowest point in 17 months.
Market consensus had penciled in a composite PMI of 48.6 and a services reading of 47.4, meaning the actual figures narrowly undershot already subdued expectations.
The numbers confirm that the eurozone economy contracted for the first time since December 2024, with inflationary pressures compounding the downturn. Consumer prices accelerated at their fastest rate in three years, squeezing household budgets and dampening spending power across the bloc.
The deterioration was most pronounced in consumer-facing services industries, where surging energy costs and widespread travel disruptions hit demand particularly hard, dragging the broader sector into negative territory.
A PMI reading above 50 reflects expanding activity, while any figure below that benchmark denotes a contraction in output.
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