Eurozone business activity accelerates in April

Eurozone business activity accelerates in April

The services sector propped up the eurozone's economic activity in April
The services sector propped up the eurozone's economic activity in April. Photo: Miguel MEDINA / AFP/File
Source: AFP

Business activity in the eurozone picked up in April thanks to "increasingly robust" growth in the services sector, a closely watched survey showed Tuesday.

The HCOB Flash Eurozone purchasing managers' index (PMI) published by S&P Global registered a figure of 51.4 in April from 50.3 in March. It was the highest in 11 months. Any reading above 50 indicates growth, while a figure below 50 shows contraction.

"The eurozone got off to a good start in the second quarter," Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said in the statement on the PMI reading.

But the survey showed activity was growing "modestly" as manufacturing output continued to fall, although the decline was not as steep as previously.

"Increasingly robust service sector growth was nevertheless accompanied by signs of a further moderation of the manufacturing downturn," S&P Global said.

Read also

London stock market hits record high

Economists said the data shows the 20-nation single currency is pulling out of the recent downturn, but the European Central Bank would still cut interest rates in June.

"The bigger-than-expected increase... suggests that the euro-zone is coming out of recession, but this will not prevent the ECB from cutting interest rates in June," Andrew Kenningham of London-based consulting firm Capital Economics.

"While these surveys are good news for the economy, we suspect that any growth will be remain quite weak in the near term," he added.

The ECB hiked rates at a record pace to tame red-hot price rises, but there are now growing calls to cut as eurozone inflation approaches the institution's two-percent target. Inflation slowed to 2.4 percent in March.

The survey also indicated that the situation in the European Union's two economic powerhouses, France and Germany, is improving.

Read also

IMF calls on EU to deepen single market integration to boost growth

Germany returned to growth in April, which will be welcome news to Berlin after criticism that its economy was slowing down the rest of Europe.

Meanwhile, the survey said France came close to stabilising with only a "marginal contraction of output".

PAY ATTENTION: Сheck out news that is picked exactly for YOU - click on “Recommended for you” and enjoy!

Source: AFP

AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.

Online view pixel