Eurozone business activity hits six-year high in April

Michele Maatouk Sharecast | 21 Apr, 2017 10:11 - Updated: 10:11 | | |

bce, banco central europeo

Business activity in the eurozone hit a six-year high in April, according to preliminary data released on Friday.

Markit’s flash composite purchasing managers’ index rose to 56.7 from 56.4 in March, which is the best reading since April 2011. Economists had been expecting a drop to 56.3.

The flash eurozone manufacturing PMI edged up to 56.8 in April from 56.2 the month before, while the services PMI increased to 56.2 from 56.0 in March.

Chris Williamson, chief business economist at IHS Markit, said: “The eurozone economy has enjoyed a strong start to the second quarter. The April flash PMI is running at a level consistent with 0.7% GDP growth, up from 0.6% in the first quarter. Such strong growth, if sustained, will inevitably lead to upward revisions to economists’ 2017 forecasts.

“Robust rates of expansion are being seen in both manufacturing and services, the former clearly benefitting from the weak euro, which has helped drive export sales growth to a six-year high. “Rising employment is also benefitting the service sector in particular via higher consumer confidence and spending. Employment growth has accelerated to the best seen for nearly a decade.”

France’s composite PMI rose to 57.4 from 56.8 in March, which was a 71-month high, but Germany’s fell to 56.3 from 57.1, marking a two-month low.

Capital Economics said: “The decline in the German index suggests that growth there may have lost a little steam after what looks like a particularly strong first quarter. The French index is now above the German equivalent for the first time since August 2012 and points to a sharp acceleration in growth. At the margin, its strength bodes well for M. Macron ahead of the French election this weekend since Mme. Le Pen tends to benefit more from pessimism about the economy.

“In all, the PMI supports our view that the euro-zone economy will expand at a healthy pace of about 2% this year as a whole. But with price pressures subdued, we still doubt that the ECB will offer any hints of policy tightening after next week’s meeting.”

More news

22 Oct Sunday newspaper round-up: Spire, Mediclinic, Rolls-Royce, Brexit, SSE, GKN

A South African healthcare provider is plotting a £1.3bn swoop on Spire Healthcare, Britain’s largest chain of private hospitals. Mediclinic International is working with advisers from Morgan Stanley on a possible offer, according to City sources. It already has a 29.9% stake in Spire - the maximum that can be held without making an offer for the other shares - having staged a raid on the stock two years ago. - The Sunday Times

22 Oct US close: S&P 500 notches up sixth weekly gain in a row, as investors come off sidelines

Wall Street continued to climb the proverbial 'wall of worry' as Senate approval of the White House's budget resolution for fiscal year 2018, which many believe paves the way for tax cuts, powered the S&P 500 to a sixth consecutive weekly gain.

20 Oct FX round-up: Dollar boosted by tax plans, pound rallies on Brexit hopes

President Donald Trump's tax reforms made the dollar the early story, before a sterling narrative took over as Brexit developments filtered through from the EU 27 in Brussels.

20 Oct President Trump wrongly links rise of UK crime to 'radical Islamic terror'

US President Donald Trump was accused of fuelling hate crimes after he said the UK crime rate was linked to "radical Islamic terror".

20 Oct Europe close: Stocks end near session lows despite US tax reform optimism

European stocks finished near their worst levels of the day despite optimism regarding prospects for the US economy.

20 Oct London close: Footsie ends flat as pound bounces back

London stocks finished the Friday session almost exactly flat despite encouraging noises emerging from Brussels mingled with optimism stateside over proposed tax reforms.

20 Oct Berenberg ups Cobham target but says premium valuation "unwarranted"

Despite Cobham share's outperformance over the past six months, Berenberg cautioned clients about the near-term strength of various of the firm's end-markets, alongside operational challenges that would require time to resolve and, for a time, scupper hopes that the dividend would be reinstated.

20 Oct Octagonal 'extremely pleased' as it reports record revenue and profits

Octagonal updated the market on its trading on Friday, based on the unaudited interim figures for the six months to 30 September for its wholly-owned subsidiary, Global Investment Strategy UK, saying it was “extremely pleased” with the record revenues and profits achieved.

20 Oct Marlowe trading in line as acquisitions integrate 'well'

Support services group Marlowe updated the market on its trading for the six months to 30 September on Friday, saying trading in the first six months of the financial year was in line with board expectations.

20 Oct Ncondezi agrees non-binding development offer with CMEC and GE

Ncondezi Energy announced on Friday that it has agreed - in principle - to the terms of a non-binding offer with China Machinery Engineering Corporation and General Electric South Africa to enter into exclusive negotiations to develop, construct and operate the integrated Ncondezi 300MW coal-fired power project and open pit coal mine in Tete, Mozambique.