April flash PMIs challenge expectations of activity rebound in Q2

This morning the release of the April flash PMIs for the euro area again defied expectations of a rebound and continued to weaken further. The euro area flash composite PMI was reported at 51.3, down from 51.6. Among sectors, confidence receded in the service sector (52.5, from 53.3) but advanced in the manufacturing sector (47.8, from 47.5).


  • With a reading of 51.3, the euro area composite flash PMI for April receded again, thereby surprising on the downside.
  • The deterioration is due to lower service sector sentiment whereas manufacturing sentiment improved, in line with latest signals about strengthening global activity.
  • The details suggest that sentiment deterioration in Southern European economies (Italy, Spain) mainly stands behind the disappointing euro area PMI reading.
  • Today’s PMI data would suggest a meagre Q2 GDP growth rate of just 0.16% qoq, thereby challenging our view of strengthening activity in Q2.

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Market Compass May 2020
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