Eurozone private sector logged a moderate expansion in April, amid signs of weaker growth of demand and supply constraints.
The composite output index remained unchanged at 55.2 in April, flash survey results from IHS Markit showed Monday. The score was forecast to drop to 55.0.
A score above 50 indicates expansion in the private sector. The unchanged reading indicated the joint-weakest expansion of business output since the start of 2017.
According to Markit, lower inflows of new orders, alongside weakened optimism about the business outlook, suggests that growth could slow further in May.
“The April data are running at a level broadly consistent with Eurozone GDP growth of approximately 0.6 percent at the start of the second quarter,” Chris Williamson, chief business economist at IHS Markit, said.
April’s PMI surveys suggest that the apparent sharp slowdown in the first quarter was not the beginning of a major downturn, although growth is unlikely to return to the rates seen last year, Jack Allen, an economist at Capital Economics, said.
Overall, the data supports the view that the European Central Bank will make no major changes to its communication at Thursday’s meeting, the economist noted.
Eurozone manufacturing again led the upturn, albeit with the rate of factory output growth slowing to a 17-month low. Meanwhile, service sector activity rose at a rate only marginally faster than March’s seven-month low.
The factory PMI came in at 56.0, down from 56.6 in March. The reading came in line with expectations.
At the same time, the services Purchasing Managers’ Index rose slightly to 55.0 from 54.9 a month ago. The score was forecast to drop marginally to 54.8.
Germany’s private sector growth stabilized in April after having slipped to an eight-month low in March. The flash composite output index improved unexpectedly to 55.3 from 55.1 in March. The reading was forecast to fall to 54.8.
Likewise, the services PMI came in at 54.1, up from 53.9 in the previous month. The score was forecast to drop to 53.7.
Meanwhile, the manufacturing PMI fell to a 9-month low of 58.1 from 58.2 in March. The reading was above the forecast of 57.5.
France’s private sector growth accelerated in April having softened in the previous two months. The composite output index rose to 56.9 in April from 56.3 in March. The expected reading was 55.9.
The services PMI climbed unexpectedly to 57.4 from 56.9 a month ago. The reading was forecast to fall to 56.5.
Meanwhile, the manufacturing PMI dropped slightly to 53.4 from 53.7 in the previous month. Economists had forecast the index to ease to 53.5.