Eurozone services sector contracts sharply in April, PMI hits 62-month low

The eurozone services sector contracted sharply in April, with the Purchasing Managers’ Index falling to its lowest level in 62 months, according to S&P Global data released Wednesday.

The eurozone services PMI dropped to 47.6 in April from 50.2 in March. The composite PMI, which measures activity in the manufacturing and services sectors, fell to 48.8 from 50.7, marking its lowest level in 17 months.

Economists had expected the composite PMI to come in at 48.6 and the services PMI at 47.4.

The data showed the eurozone economy contracted for the first time since December 2024 as inflation continued to rise. Prices increased at the fastest pace in three years.

The slowdown was concentrated in the services sector, particularly consumer-facing industries, as rising energy costs and travel disruptions weighed on demand.

A PMI reading above 50 indicates expansion, while a reading below 50 signals contraction.