Eurozone Private Sector Contracts Most in 17 Months

2026-04-23 08:11 By Andre Joaquim 1 min. read

The S&P Global Eurozone Composite PMI fell to 48.6 in April of 2026 from 50.7 in March, contrasting with expectations of 50.2 for the sharpest contraction in the bloc's private-sector activity since November of 2024.

The drop indicated a somewhat delayed impact on the services sector (47.4 vs 50.2 in March) from the war in Iran, as higher energy costs weighed on consumer demand.

Business activity for service providers dropped the most in five years, especially in Germany, due to its reliance on foreign feedstock for electricity generation.

In turn, the manufacturing sector posted an aggressive expansion (52.2 vs 52.0) despite the difficulty to source input goods.

Input costs at the aggregate level rose the most since the end of 2022, driving companies to increase output charges the most in three years.

Still, both sectors maintained their staffing levels broadly unchanged.

The fresh headwinds from the war drove business outlook to decline sharply.



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Eurozone Private Sector Contracts Most in 17 Months
The S&P Global Eurozone Composite PMI fell to 48.6 in April of 2026 from 50.7 in March, contrasting with expectations of 50.2 for the sharpest contraction in the bloc's private-sector activity since November of 2024. The drop indicated a somewhat delayed impact on the services sector (47.4 vs 50.2 in March) from the war in Iran, as higher energy costs weighed on consumer demand. Business activity for service providers dropped the most in five years, especially in Germany, due to its reliance on foreign feedstock for electricity generation. In turn, the manufacturing sector posted an aggressive expansion (52.2 vs 52.0) despite the difficulty to source input goods. Input costs at the aggregate level rose the most since the end of 2022, driving companies to increase output charges the most in three years. Still, both sectors maintained their staffing levels broadly unchanged. The fresh headwinds from the war drove business outlook to decline sharply.
2026-04-23
Eurozone Growth Slows in March as War and Inflation Bite
The S&P Global Eurozone Composite PMI was revised up slightly to 50.7 in March 2026 (from a flash estimate of 50.5), but remained below February’s 51.9, signaling the weakest private-sector expansion since June 2025. The slowdown reflects a mix of soaring energy prices, disrupted supply chains, financial market turbulence, and slumping demand, all exacerbated by the Middle East war. Service sector activity stagnated, while manufacturing output held firm. However, new orders fell, with export demand weakening further, and backlogs of work shrank at the slowest pace since October 2025. Employment cuts accelerated to a 13-month high, as businesses faced mounting pressures. On the inflation front, input costs surged to a three-year peak, and output price inflation hit its highest level since February 2024. Meanwhile, business confidence slumped to its lowest in almost a year.
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The S&P Global Eurozone Composite PMI declined to 50.5 in March 2026, down from 51.9 in February and below market expectations of 51.0, according to preliminary data. This signals only marginal growth in the bloc’s private sector, the weakest in ten months, as service sector activity nearly stalled. New orders contracted for the first time in eight months, and employment continued to fall amid rising uncertainty tied to the Middle East conflict. On the price front, input cost inflation surged to its fastest pace since February 2023, while output prices rose at the sharpest rate since February 2024. Supply chains also faced severe disruptions, with suppliers’ delivery times lengthening the most in over three-and-a-half years. Finally, business confidence plummeted to its lowest in nearly a year, marking the steepest drop since Russia’s invasion of Ukraine in 2022.
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