The Eurozone private sector saw output remain broadly stable in April, as signalled by provisional PMI survey data. Business activity was held back by a faster reduction in new orders and waning confidence in the year-ahead outlook. In fact, business sentiment was the lowest for almost two-and-a-half years.
In line with the picture for output, there was little change to euro area employment at the start of the second quarter. Manufacturers continued to scale back purchasing, albeit to the least marked extent in almost three years.
Meanwhile, overall inflationary pressures eased, with both input costs and output prices rising at weaker rates.
The seasonally adjusted HCOB Flash Eurozone Composite PMI Output Index, based on approximately 85% of usual survey responses and compiled by S&P Global, posted 50.1 in April, only fractionally above the 50.0 no-change mark and therefore signalling a broadly stable picture for business activity as the second quarter of the year began. The latest reading was down from 50.9 in March and the lowest in four months.
There were contrasting trends between the two broad sectors covered. Services business activity decreased marginally in April, thereby ending a four-month sequence of growth. On the other hand, manufacturing production rose for the second consecutive month. Although the pace of expansion remained only modest, the latest rise was the most marked since May 2022.
April saw a sharp drop in business confidence in the euro area, with sentiment down to the lowest since November 2022. After having risen for the first time in eight months during March, employment broadly stagnated in April.
Input costs increased at the slowest pace since November last year, and at a rate that was below the series average. Output prices also increased at a weaker pace in April, with the rate of inflation easing to a five-month low.