European Economic PMI Falls Below 50-Point Threshold.

■ The Eurozone PMI fell below the 50-point threshold separating expansion from contraction, with the composite index declining, indicating a significant weakening of economic momentum.  

■ A sharp decline in the service sector dragged down overall performance, while rising inflationary pressures coupled with significantly weakened confidence. 
 
The preliminary Eurozone PMI for April showed the composite index (48.6, down 2.1 points from the previous month) falling below the 50-point threshold for the first time in 1 year and 4 months. The main reason for this decline was the service sector (47.4, down 2.8 points from the previous month), recording its largest drop since February 2021 during the COVID-19 pandemic. Manufacturing (52.2, up 0.6 points from the previous month) showed some resilience, recovering somewhat. However, according to the issuing agency, businesses increased inventories to cope with further price increases and supply shortages, which, to some extent, boosted demand. Regarding price-related indicators, both the input price index and the output price index rose, indicating increased inflationary pressures. Looking at the composite indices from various countries, Germany (48.3, down 3.6 points from the previous month) and France (47.6, down 1.2 points from the previous month) both declined for the second consecutive month, driven primarily by the service sector. 

 
The preliminary consumer confidence index released by the European Commission (EC) in April (-20.6, down 4.2 points from the previous month) fell to its lowest level since December 2022. Consumer confidence deteriorated significantly due to uncertainty in the Middle East and transportation disruptions, pushing up energy prices.