Business activity in the countries of the euro area experienced strong growth in April, and achieved its best performance in the last 11 months, according to the S&P Global Flash PMI index, released this Friday.
The boost in business activity in the euro zone in April reflects the acceleration of the services sector, whose preliminary PMI has improved to 56.6 points since March 55, a one-year high, while the PMI manufacturing shows further deterioration, down to 45.5 integers, compared to 47.3 in March, its worst reading in 35 months.
A PMI indicator above 50 indicates an increase in economic activity and when it is below that threshold it indicates a contraction. In addition, it marks a result higher than market expectations. According to a survey carried out by the news agency Reutersthe forecast was that there would be no changes compared to March.
In this sense, the chief economist of the Hamburg Commercial Bank, Cyrus de la Rubia, highlighted the “very favorable” outlook that the PMIs point to for the recovery of the euro zone, despite the uneven performance of services and manufacturing, with particular attention to the deterioration observed in French and German industry.
In this way, the expert warns that, while the evolution of prices in the services sector will probably continue to worry the European Central Bank (ECB), since they do not offer signs of a slowdown, in the case of the manufacturing sector the trend of drop, also fueled by the lower cost of energy.
For his part, Bert Colijn, chief economist at ING, points out that the data cast “a positive light on the economic results of the euro zone”, especially thanks to the recovery of the service sector.
National PMI indices showed that activity in Germany grew for the third consecutive month in April, thanks to the reactivation of the services sector that offset the contraction in manufacturing activity.
In France, business activity grew faster than expected, thanks to strong growth in the services sector, despite protests against plans to increase the retirement age, which directly affected the manufacturing sector.
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