Brussels, April 24 (QNA) - Economic activity in the euro area contracted in April, marking its first decline in 16 months, amid pressures stemming from the war in the Middle East and the resulting rise in energy prices and disruption of global supply chains.

The composite Purchasing Managers' Index (PMI) for the euro area, issued by S&P Global, fell to 48.6 points this month, compared with 50.7 points in March.

The report noted that the unexpected drop reflected the euro area economy entering a contraction phase, after recording a reading above 50 in the previous month, the level that typically indicates expansion in economic activity, while a reading below that threshold signals contraction.

The decline was driven mainly by a sharp drop in services sector activity, which recorded its fastest pace of contraction in more than five years. Meanwhile, the manufacturing sector continued to show growth, with output expanding at the fastest pace since last August. However, this was partly due to customers placing additional orders to build inventories in anticipation of future price increases or potential supply shortages.

The report noted that the downturn was broad-based across the euro area, with both Germany and France (the two largest economies in the EU) recording contractions in activity during the same month. (QNA)