Eurozone Business Activity Faces a Setback in April

The preliminary report from S&P Global and Hamburg Commercial Bank (HCOB) reveals a concerning trend for the Eurozone's business activity in April. The Flash Eurozone Composite PMI Output Index, a key indicator of the region's services and manufacturing sectors, registered at 50.1. This marks a decline from March's 50.9, setting a 4-month low.

Service Sector Takes a Hit

Particularly noteworthy is the Flash Services PMI Business Activity Index, which fell to 49.7 in April, down by 1.3 points from March and reaching a 5-month low. This downturn contrasts sharply with the manufacturing sector's performance.

Manufacturing Sector Shows Unexpected Strength

Despite the challenges, the Flash Eurozone Manufacturing PMI reached a 27-month high at 48.7. "Manufacturing seems to be holding up better than expected," remarked HCOB Chief Economist Cyrus de la Rubia. He highlighted that despite new US tariffs, Eurozone manufacturers have not only sustained but increased production for the second consecutive month, surpassing March's figures.

However, de la Rubia also pointed out the service sector's underperformance, labeling it as "a bit of a party pooper" in an otherwise resilient economic landscape.