- Prior 51.0
- Composite PMI 50.4 vs 50.1 prelim
- Prior 50.9
The reading reaffirms stagnation in the euro area economy to start Q2, with the services sector experiencing a stall. Demand conditions continue to suffer and that’s not a good look amid a more challenging economic backdrop in the months ahead. The good news at least is that price pressures have eased a touch further on the month. HCOB notes that:
“Eurozone economic growth slowed at the start of the second quarter, following a pick-up in the first three months of the
year. The services sector, which is a major player, practically stagnated in April. Even though manufacturing output saw a
surprising uptick, it wasn’t enough to prevent the overall slowdown in growth.
“In the services sector, cost pressures are still relatively high, though they have eased a bit over the past couple of months.
Inflation is down for sales prices and continued to trend lower. Many members of the European Central Bank (ECB) have
been hinting at another interest rate cut in June, and these latest figures seem to support their stance.
“Euro area employment has seen a slight stabilization. The drop in headcounts among manufacturers has been more-thancounterbalanced by an increase in jobs within the service sector. Overall, there’s still a noticeable hesitation to hire new staff,
which isn’t too surprising given the current uncertainties.
“Spain is leading the pack in terms of growth, followed by Italy, then Germany with marginal growth, and France trailing
behind. This is reflected in the Composite PMI data for the first four months of 2025 and aligns with Eurostat’s GDP data for
the first quarter. We expect Germany to soon outpace Italy thanks to a generous fiscal package, while France is likely to
remain at the bottom for now due to its uncertain political climate.”
This article was written by Justin Low at www.forexlive.com.
