Eurozone economic growth hit a new six-year high in April, according to PMI data. Employment levels also rose to a record high in nearly a decade, with companies relaunching their operational capabilities amid strong demand and general optimism about future prospects. Price pressure also remained among the strongest values in more than six years.
Here are the indices: Flash Eurozone Composite Manufacturing PMI at 56.7 (56.4 in March). Record value in 72 months. Flash PMI of Tertiary Activities in the Eurozone at 56.2 (56.0 in March). Record value in 72 months. Flash PMI from Manufacturing Production in the Eurozone at 58.0 (57.5 in March). Record value in 72 months.
The sharp increase in demand supported a high level of optimism about next year's business prospects, with future expectations just below the March record, the month in which the highest historical value was recorded since the start of comparable data collection. The optimism and strong volume of orders received have in turn prompted companies to add headcount at the fastest rate since July 2007.
From a national point of view, the highest growth of the activity in France, the strongest since May 2011, it was counterbalanced by the German slowdown, even if the rate of expansion in Germany has nonetheless marked one of the fastest values in the last six years. Elsewhere, output growth accelerated to the strongest rate since July 2007.
“Strong start to the second quarter for the eurozone economy, with its April flash PMI at a level in line with 0.7% GDP growth and up from 0.6% in the first quarter. An expansion of this magnitude – he comments Chris Williamson, Chief Business Economist at IHS Markit - if it continues, it will inevitably make economists' forecasts for 2017 revised upwards".
“High growth rates were observed both in the manufacturing sector – he continued – and in that of services, the former favored by the weakness of the euro which caused exports to grow to their highest level in six years. Increased consumer optimism and spending propensity has also boosted service sector employment growth, with growth accelerating to the highest rate observed in nearly a decade.
“The election in France – in conclusion – represents the clearest short-term threat to the future, even if during the preparatory phase for the vote, optimism was certainly positive. In this climate of increased confidence, growth in France was higher than in Germany. Both nations reported the best expansion rates in six years, while in the other nations, underlining how general growth is, the pace of increase has reached its highest levels in almost ten years”.
