The S&P Global Eurozone Composite PMI declined to 48.6 in April 2026 from 50.7 in March, undershooting expectations of 50.2 and signaling the sharpest contraction in the bloc’s private-sector activity since November 2024. The downturn reflected a delayed hit to the services sector (47.4 vs. 50.2 in March) from the war in Iran, as higher energy prices eroded consumer demand. Service-sector activity fell at the steepest pace in five years, led by Germany, where dependence on imported feedstock for power generation left providers particularly exposed.
By contrast, manufacturing registered solid growth, with its PMI rising to 52.2 from 51.6, even as firms struggled to secure input materials. At the aggregate level, input costs increased at the fastest rate since late 2022, prompting companies to lift output prices at the strongest pace in three years. Despite these pressures, employment in both manufacturing and services was broadly stable. However, the renewed geopolitical headwinds from the war caused business sentiment to deteriorate sharply.
