Eurozone Private Sector Growth Strongest In Almost A Year
23 Avril 2024 - 10:39AM
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The euro area private sector expanded the most in nearly a year
in April as the continuing downturn in the manufacturing activity
was offset the strength in the service sector, flash survey results
from S&P Global showed on Tuesday. The composite output index
registered 51.4 in April, up from 50.3 in March. The reading stayed
above economists' forecast of 50.8.
The private sector expanded for the second month in a row in
April after a continual decline over the nine months to February.
The score signaled the strongest growth since last May.
Service sector output expanded for a third consecutive month
with the pace of expansion strongest since eleven months, while
manufacturing output shrank for a thirteenth straight month.
New orders for services advanced at the fastest pace since last
May but orders for manufactured goods declined at an accelerated
rate.
Employment grew for a fourth month in a row after two months of
marginal declines at the end of 2023. The rate of net job creation
accelerated to the highest since last June.
Manufacturing supplier delivery times shortened for a third
successive month and improved to the greatest degree since last
August. Both input costs and average selling prices increased at
faster rates in April. At composite level, input costs posted the
joint-fastest rise seen over the past year.
Selling price inflation accelerated from March's four-month low
and stayed above long-run average.
Business expectations about the coming twelve months cooled
slightly but was the second highest recorded over the past 14
months, the survey showed.
"…our GDP forecast suggests a 0.3 percent expansion in the
second quarter, matching the growth rate seen in the first quarter,
both measured against the preceding quarter," Hamburg Commercial
Bank chief economist Cyrus de la Rubia said.
The PMI figures are poised to test the European Central Bank's
willingness to cut interest rates in June as input costs increased
amid higher oil prices and higher wages. Nonetheless, the ECB is
expected to cut rates in June, the economist noted. "However, we
doubt that the central bank will adopt a "pragmatic speed", as
suggested by Francois Villeroy de Galhau from the ECB. Instead, we
expect a more cautious approach," Rubia said.
Further, the survey showed that solid growth outside of France
and Germany was again reported. Germany returned to growth in April
and France moved closer to stabilization.
Germany's private sector expanded for the first time in ten
months in April underpinned by a solid rise in services
activity.
The flash composite output index rose more-than-expected to 50.5
in April from 47.7 in the previous month. The reading was seen at
48.6.
The services PMI posted a ten-month high reading of 53.3 in
April, up from 50.1 in the previous month. Economists had forecast
the index to climb to 50.6.
At 42.2, the manufacturing PMI rose moderately from 41.9 in
March but remained below forecast of 42.8.
Driven by the renewed expansion in the service sector, France's
flash HCOB composite output index hit an 11-month high of 49.9 from
48.3 in the previous month.
While services activity expanded for the first time since May
2023, the accelerated decline in manufacturing output weighed on
the pace of overall expansion.
The services PMI registered 50.5, which was the highest score in
eleven months. The score was forecast to climb to 48.9 from 48.3 in
February.
By contrast, the manufacturing PMI dropped to a three-month low
of 44.9 from 46.2 a month ago. The expected score was 46.9.
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