Eurozone business growth eases in April
Eurozone business growth eased in April, according to final data released on Friday.
IHS Markit’s final eurozone composite output index - which measures both the services and manufacturing sectors - slipped to 55.1 from 55.2 in March, coming in below the unchanged flash estimate.
Still, the headline index has signalled expansion in each of the past 58 months and remains above its average for that sequence of 54.0.
Meanwhile, the services index declined to 54.7 in April from 54.9 the month before and was below the flash estimate of 55.0.
Claus Vistesen at Pantheon Macroeconomics said the main downside surprises came from Italy and Germany. The Italian composite PMI slid to a 14-month low of 52.9 from 53.5 in March due to weakness in manufacturing and because services failed to rebound from its March decline. In Germany, meanwhile, the composite index fell more than initially estimated, to 54.6 from 55.1, because of a downward adjustment to the services PMI.
Chris Williamson, chief business economist at IHS Markit, said: "The final PMI numbers confirm the marked, broad-based fading of the eurozone’s growth spurt so far this year. The headline index has fallen from an eleven-and-a-half year peak in January to a 15- month low in April. Despite the drop, the PMI is not yet at a worryingly low level, but the survey details hint at further easing in the coming months.
"While the expansion signalled by April’s PMI is disappointing relative to the elevated levels seen at the start of the year, the survey remains indicative of the eurozone economy growing at a robust quarterly rate of approximately 0.5-0.6%. Employment growth is also still booming, with the rate of job creation in the service sector at its highest for over a decade."
Also on Friday, figures from Eurostat showed that eurozone retail sales rose 0.1% month-on-month in March, coming in below consensus expectations of a 0.5% increase. The year-over-year rate fell to 0.8% from 1.8% in February, missing expectations of 1.9%.
Vistesen said: "These data don’t tell us anything we didn’t already know from last week’s advance Q1 GDP data; the eurozone economy slowed at the start of the year. That said, it is another soft headline and the year-over-year rate is particularly striking.
"Notwithstanding the plunge in October last year, retail sales are now rising at their slowest pace since 2014. The headline was hit by further weakness in non-food sales, which are now down a cumulative 2.6% since December. We are encouraged, however, by a rebound in online shopping following a string of poor data."