European business activity weakened in April as fresh purchasing managers’ index data pointed to a widening split between manufacturing resilience and a downturn in services, while tensions in the Gulf kept energy markets on edge.
The flash Eurozone PMI showed composite output at 48.6, signaling contraction. Manufacturing rose to 52.2, indicating expansion, while services fell to 47.4, underscoring the growing hit from the energy shock and transport disruption. The pattern was broadly repeated across the region, with France’s business activity dropping to a 14-month low.
The data landed as the U.S. military said it intercepted two Iranian supertankers that had attempted to evade Washington’s blockade of the Strait of Hormuz, intensifying concerns over global fuel flows. Brent crude rose 1% to $103 a barrel.
Europe’s energy system is moving into emergency mode as refiners try to prevent shortages, especially in aviation fuel.
Europe’s largest refinery has stepped up jet-fuel production to avoid rationing, while Shell said all oil refineries in Europe are operating at full capacity. The head of the International Energy Agency warned that the world faces the biggest energy security threat in history, adding to pressure on governments to prepare contingency measures.
In Sweden, Prime Minister Ulf Kristersson said the country may restrict energy use if the war in Iran drags on much longer, a sign that policymakers are beginning to prepare the public for tougher conservation steps.
Against the weaker macro backdrop, Nestlé reported resilient first-quarter sales growth, helped by demand for coffee and snacks. The shares rose 6% in Zurich, making the company one of the stronger performers in European trading as investors rotated toward defensive consumer names.
Risk assets remained under pressure. European and Asian stocks fell about 0.5%, while U.S. futures were down by a similar margin.
The combination of falling services activity, full-capacity refining, and renewed confrontation around Hormuz is reinforcing a market view that the economic damage from the energy crisis is broadening beyond transport and heavy industry into the wider consumer economy.
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