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

28 Apr S&P reaffirms AA rating on UK, outlook clouded by Brexit

Standard&Poor's reaffirmed its rating on the United Kingdom's long-term sovereign debt but warned of the potential impact on the economy from the uncertainty around the Brexit negotiations and their eventual outcome.

28 Apr FX round-up: Sterling nonchalant after UK Q1 growth disappoints

Sterling made steady gains on most key cross on Friday, appearing nonchalant in its reaction to disappointing UK economic growth data out mid-morning.

28 Apr Europe close: Weak US, UK GDP weigh on shareson the continent

European stocks ended the day on a mixed note after weak readings on UK and US GDP dragged many indices into the red at the end of the month.

28 Apr Laird off to solid start, but second half remains key

Electronic component maker Laird reported strong sales growth in the first quarter of 2017 after a difficult year.

28 Apr General Motors truck and SUV sales drive record earnings

Growth at General Motors accelerated past analyst forecasts with a record first-quarter set of earnings.

28 Apr RBS and Lloyds Bank customers hit by online glitch on payday

Royal Bank of Scotland and Lloyds Banking Group customers were prevented from accessing money in their accounts due to a technical glitch ahead of the bank holiday weekend.

28 Apr Kennedy Wilson confirms quarterly dividend, new office leases

Kennedy Wilson Europe Real Estate announced it will pay an interim quarterly dividend of 12.0p per share, while also reporting strong leasing momentum across key investments in Greater London and Dublin.

28 Apr Time spins backwards on decision not to sell business

Time Inc stock reversed recent gains after the board decided not to sell the publishing business as it was being "reinvigorated" under a new strategy.

28 Apr Morgan Stanley downgrades Berendsen on competition concerns

Berendsen not only needs to invest in property, plant and equipment but is facing increasing competition in the UK, warned Morgan Stanley as it downgraded the stock on Friday.

28 Apr UK mortgages and consumer credit card borrowing both decline - BBA

Mortgage approvals and consumer credit card lending both fell in March according to fresh data from the banking industry, providing the reason for the fall in house prices announced elsewhere on Friday.