Eurozone business activity experienced a significant upswing in April, reaching its fastest growth rate in nearly a year, driven by a resurgence in the dominant services industry. The composite Purchasing Managers' Index (PMI), a reliable indicator of overall economic health, climbed to 51.7 in April, exceeding the preliminary estimate of 51.4 and indicating a solid expansion. This positive momentum marks the second consecutive month of growth, with the PMI remaining above the 50-point threshold that separates growth from contraction.
The services sector played a pivotal role in this growth, with its PMI jumping to 53.3, surpassing the initial estimate of 52.9 and reaching its highest level since May 2022. This expansion suggests that service providers are regaining momentum after a period of sluggishness in the latter half of last year.
Despite these positive developments in the services sector, the manufacturing industry faced a deeper downturn, reflecting ongoing challenges in the global supply chain and geopolitical tensions. However, the overall impact of the manufacturing slowdown was outweighed by the robust growth in services, resulting in a solid overall expansion for the Eurozone economy.
Business optimism remains high, with the composite future output index staying close to its recent peak, indicating confidence in the economic outlook. This optimism stems from expectations of improving supply chain conditions and easing inflationary pressures, leading businesses to anticipate continued growth in the coming months.
