Business activity across the eurozone remained largely flat in April, with the HCOB Flash Composite PMI dipping to 50.1 from 50.9 in March — the lowest in four months and just above the no-change threshold. Economists had expected a decline to 50.3. The slowdown was driven by a sharper drop in new orders and weakening confidence, which fell to its lowest level in over two years.
Service sector activity declined slightly, ending four months of growth, while manufacturing output grew modestly at its fastest rate since May 2022.
New orders declined for the 11th month running — the steepest drop in 2025 so far — affecting both manufacturing and services. Export orders also fell at a similar rate, continuing a downward trend since March 2022.
Business sentiment dropped significantly, reaching its lowest point since November 2022. Optimism fell across sectors and countries, with France turning pessimistic, and Germany and others showing waning confidence.
Employment stagnated after a brief uptick in March. Manufacturing job losses offset modest hiring in services. Despite limited hiring, firms managed to reduce backlogs of work for the 25th straight month, though the rate of decline eased.
Inflationary pressures continued to ease. Input costs rose at their slowest pace since last November, with manufacturing costs actually falling. Output price inflation slowed overall, though manufacturers saw a modest rise in charges. Services prices increased at the weakest pace since September, with France cutting prices for the first time in three months.
Manufacturers cut purchasing for the 34th month in a row, though at the slowest pace in almost three years. Inventory reductions also eased, and supplier delivery times improved significantly for the third consecutive month.