Business activity in the Eurozone picks up speed in April | News

Business activity in the eurozone is on the rise, with the services sector leading the way in April, according to the latest HCOB Flash Eurozone purchasing managers’ index (PMI) published by S&P Global. The PMI registered a figure of 51.4 in April, up from 50.3 in March, marking the highest level in 11 months.

Chief economist Cyrus de la Rubia of Hamburg Commercial Bank noted that the eurozone had a strong start to the second quarter, with the services sector showing “increasingly robust” growth. However, the survey also revealed that manufacturing output continued to decline, although at a slower rate than before.

Despite the positive signs of growth in the services sector, economists predict that the European Central Bank will still cut interest rates in June. Andrew Kenningham of Capital Economics stated, “The bigger-than-expected increase… suggests that the eurozone is coming out of recession, but this will not prevent the ECB from cutting interest rates in June.”

The survey also highlighted improvements in the economic powerhouses of the European Union, with Germany returning to growth in April and France showing signs of stabilizing with only a “marginal contraction of output.”

Overall, the data indicates that the eurozone is pulling out of the recent downturn, but economists caution that growth may remain weak in the near term. With inflation slowing to 2.4 percent in March, there are increasing calls for the ECB to cut rates to stimulate further economic growth.