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A brief overview of the economic indicators of several European countries and the Eurozone as a whole
According to preliminary data from the Hamburg Commercial Bank (HCOB) and S&P Global, business activity in the euro area grew at the fastest pace since 2023 in April. March. The composite PMI index for the euro area rose to an 11-month high of 51.4 points from 50.3 points in March.
Analysts predicted that the value of the index will be 50.7 points (the dividing line of 50 points separates the growth of business activity from its decline). In the service sector, the index increased to 52.9 points (in March – 51.5 points, forecast – 51.8 points), in the manufacturing sector – it decreased to 45.6 points (46.1 and 46.6 points, respectively).
Much of the increase in business activity recorded at the start of the second quarter was due to better indicators in Germany. For the first time in ten months, the composite PMI index of this country is in the growth zone: the preliminary value of the indicator is 50.5 points (47.7 in March).
The service sector index increased noticeably: After 50.1 points a month ago and instead of the forecasted 50.5 points – 53.3 points. HCOB notes that the services sector is showing clear signs of a gradual recovery, which is what allowed Germany to avoid a technical recession at the end of the previous two quarters.
The German industrial PMI still shows that business activity is slowing: the indicator remains negative, but after 41.9 points in March, it increased to 42.2 points in April.
The Bundesbank (Germany’s central bank) last week reported some improvement in the manufacturing situation, with output in energy-intensive industries increasing as well as exports, according to first-quarter results. It should be noted that neither domestic nor external observers are yet convinced of the sustainability of the country’s economic recovery.
In another large economy of the euro zone, France, the composite PMI index did not enter the growth zone in April and amounted to 49.9 points. The increase of the indicator after 48.3 points in March can also be explained by the improved situation in the service sector. We will remind you that, in contrast to Germany, the growth of the French economy is traditionally supported by this sector.
S&P Global notes that a certain revival of business activity in the countries of the euro area (even if the May trend persists) is unlikely to have a significant impact on the ECB’s position – the supervisory authority intends to switch to monetary policy easing already in June.
