The three major economies of Germany, France, and Italy are joining forces, and the manufacturing sector in the Eurozone stabilized in April.

According to a survey released on Friday, although overall manufacturing activity is still in a contraction phase, the Eurozone's manufacturing output in April grew at the fastest rate in over three years, showing signs of improvement in the three major economies. The data shows that the Eurozone's April SPGI manufacturing PMI final value increased from 48.6 in March to 49.0, the highest level in 32 months, but still below the 50 threshold. Chief Economist at Hamburg Commercial Bank, Cyrus de la Rubia, said: "The PMI rising for the fourth consecutive month can be seen as a sign that the manufacturing situation is stabilizing. Considering the recent uncertainties and shocks in the past few months, this comes as a surprise." The output sub-index rose from 50.5 in March to 51.5, the highest level since March 2022, indicating that despite weak demand, output continued to grow for the second consecutive month. New orders continued to decline, but at the slowest rate in three years, with the sub-index at 49.5, close to stabilizing. Exports remained a major drag, with the decline in overseas orders greater than the overall decline in new business. The three major Eurozone economies - Germany, France, and Italy - all showed improvement, although their PMI remained in the contraction zone. "The Eurozone's industrial economy is approaching stabilization thanks to the rebound in output in Germany and France in April, with Italy also making efforts to return to expansion," de la Rubia added. Factory employment has been declining for the 23rd consecutive month, although the pace of layoffs is the slowest since June last year. Input costs have dropped for the first time since November last year, while output prices have increased at the fastest rate in two years, leading to an increase in manufacturers' profit margins. The survey showed that business confidence has fallen to its lowest level since 2025, indicating that despite improvements in production trends, factory operators remain cautious. The composite PMI, including the services sector, will be released next week, providing a more comprehensive reflection of the health of the Eurozone economy.