European Manufacturing Weakens as PMI Dips Below 50
Brussels, Friday, 2 May 2025.
In April 2025, Europe’s Manufacturing PMI fell to 48.7, signaling a contraction in manufacturing with new export orders rapidly declining due to ongoing tariff pressures.
Deepening Manufacturing Slowdown
The latest manufacturing data reveals concerning trends across Europe’s industrial sector. The Manufacturing PMI dropped to 48.7% in April 2025, marking a 0.3 percentage point decline from March’s reading of 49% [1]. This represents the second consecutive month of contraction, following a brief two-month expansion period [1]. The decline is particularly worrying as it coincides with similar contractions in major manufacturing economies, with China’s PMI falling to 49.0, its lowest level in 16 months [5].
Production and Orders Under Pressure
Production levels have deteriorated significantly, with the Production Index registering just 44% in April, showing a sharp decline of 4.3 percentage points from March’s 48.3% [1]. New orders continue to weaken, with the index contracting for the third consecutive month at 47.2% [1]. The decline in export orders has been particularly severe, with manufacturers reporting significant challenges related to tariff implementations and supply chain disruptions [2]. Industry leaders report major issues with customer orders, citing tariff uncertainty as a primary factor in delayed or canceled purchases [1].
Employment and Price Pressures
The employment situation in manufacturing remains concerning, with the Employment Index at 46.5% in April 2025 [1]. While this represents a slight improvement of 1.8 percentage points from March, it still indicates ongoing contraction in manufacturing employment [1]. Price pressures continue to mount, with the Prices Index reaching 69.8% in April, marking the seventh consecutive month of increases [1]. Raw material costs are particularly affected, with steel and aluminum prices driving up expenses throughout the value chain [1].
Future Outlook and Global Impact
The global economic context adds further complexity to Europe’s manufacturing challenges. With worldwide business confidence falling to six-month lows [4], and the U.S. manufacturing sector showing only marginal expansion at 50.2 points [2], the outlook remains uncertain. Analysts anticipate these challenges may persist, with manufacturing PMI projected to stabilize around 50.0 points in 2026 [2]. The impact of recent tariff implementations continues to reverberate through global supply chains, affecting both production costs and delivery times [1][4].