National Flash PMIs (SPG-HCOB)

The HCOB Eurozone Composite PMI declined to 50.1 in April 2025 from 50.9 in March, missing expectations and suggesting that private sector growth is on increasingly fragile ground. While this marked the fourth straight month above the 50 threshold, services slipped into contraction at 49.7, and manufacturing remained weak at 48.7. New orders fell for the 11th consecutive month, and business sentiment dropped to its lowest in over two years. Input and output price pressures eased slightly, but employment stagnated due to weak demand. Germany’s composite PMI slid to 50.2, with modest gains in manufacturing and continued contraction in services. In France, the composite index fell to 47.3, marking the eighth straight month of private sector decline, driven by weak demand and collapsing confidence.

Interpretation

April’s PMI flash estimates paint a bleak picture of Eurozone economic momentum, with the headline Composite PMI dropping to 50.1 - barely in expansionary territory and its lowest level since December 2024. The data reinforces a message of stagnation at best and the early signs of renewed contraction at worst.

The deterioration is broad-based. Services - previously the lone the support for the Eurozone’s forgot how to grow - fell into contraction at 49.7, ending a five-month expansion streak. New business in services declined, as did export orders, highlighting that demand weakness is both domestic and external. Employment gains slowed, and business confidence collapsed to a near five-year low, reflecting rising anxiety over trade tensions, especially with the US.

Manufacturing PMI ticked up marginally to 48.7, its highest in 27 months, but still deep in contraction. This mild improvement was not demand-driven: new orders and export sales continued to fall, suggesting output growth is likely tied to inventory restocking and frontloading ahead of potential tariffs. With input costs falling for the first time in five months, producers seized the opportunity to raise output prices, in some cases anticipating increased defense-related demand, especially in dual-use goods.

National data further darkens the outlook. Germany, the region’s largest economy, posted composite PMI of 50.2, but its services sector contracted at 48.8, and the improvement in manufacturing is most likely to fade after being propped up by temporary stockpiling and a weaker euro. Meanwhile, France continued to slide, with a composite PMI of 47.3 and services at 46.8. This marked the eighth consecutive monthly contraction, as new business collapsed and sentiment hit its lowest since 2020.

In sum, the Eurozone appears stuck in a state of nominal expansion with the same growing recessionary undertones. The soft data confirms a struggling private sector, drastically deteriorating confidence, and limited potential for a turnaround. With trade uncertainty rising and France and Germany both contracting in services, the risk of falling all the way is clearly mounting.