European economic service industry activity is sluggish, and consumer confidence is declining.
2025-05-07
■ The Eurozone's service PMI fell below 50 in April, indicating that service sector activity has shrunk, while consumer confidence has fallen sharply to a six-month low.
■ Despite the US tariffs, the Eurozone manufacturing and German business sentiment indexes continue to improve, showing that the overall economy is still resilient.
The preliminary Eurozone PMI for April showed that the manufacturing index was 48.7, up 0.1 percentage points from the previous month, and has risen for four consecutive months, indicating that the pace of contraction in manufacturing activity has slowed down. Despite the US's implementation of a unified 10% tariff and a 25% automobile tariff, the pace of production expansion has accelerated, and as of April, the impact of US tariffs is still relatively limited. In contrast, the service PMI fell to 49.7 (down 1.3 percentage points month-on-month), the first time it has fallen below 50 in five months, indicating that service sector activity has begun to contract. With fewer new orders, the recent downturn in service sector activity has become more obvious.
The preliminary Eurozone consumer confidence index for April was -16.7, down 2.2 percentage points month-on-month, a sharp decline to the lowest level since November 2023. Although the preliminary value does not provide detailed sub-item data, it can be inferred that consumers' expectations of economic and financial conditions have deteriorated due to the increase in US tariffs and the resulting financial market fluctuations.
In April, Germany's Ifo business climate index was 86.9, up 0.2 percentage points from the previous month. Although the increase was not large, it has risen for four consecutive months. The current situation index rose, while the expectation index fell only slightly. Despite the market's increasing vigilance against the US tariff policy, the business conditions of the service and construction industries have improved.
■ Despite the US tariffs, the Eurozone manufacturing and German business sentiment indexes continue to improve, showing that the overall economy is still resilient.
The preliminary Eurozone PMI for April showed that the manufacturing index was 48.7, up 0.1 percentage points from the previous month, and has risen for four consecutive months, indicating that the pace of contraction in manufacturing activity has slowed down. Despite the US's implementation of a unified 10% tariff and a 25% automobile tariff, the pace of production expansion has accelerated, and as of April, the impact of US tariffs is still relatively limited. In contrast, the service PMI fell to 49.7 (down 1.3 percentage points month-on-month), the first time it has fallen below 50 in five months, indicating that service sector activity has begun to contract. With fewer new orders, the recent downturn in service sector activity has become more obvious.
The preliminary Eurozone consumer confidence index for April was -16.7, down 2.2 percentage points month-on-month, a sharp decline to the lowest level since November 2023. Although the preliminary value does not provide detailed sub-item data, it can be inferred that consumers' expectations of economic and financial conditions have deteriorated due to the increase in US tariffs and the resulting financial market fluctuations.
In April, Germany's Ifo business climate index was 86.9, up 0.2 percentage points from the previous month. Although the increase was not large, it has risen for four consecutive months. The current situation index rose, while the expectation index fell only slightly. Despite the market's increasing vigilance against the US tariff policy, the business conditions of the service and construction industries have improved.