- Services PMI was 53.3, higher than the expected 52.9 and the previous reading of 51.5.
- The overall PMI was 51.7, higher than the expected 51.4 and the previous reading of 50.3.
The main comments are:
- The HCOB Eurozone Composite PMI Production Index was 51.7, an 11-month high compared to 50.3 in March.
- The HCOB Eurozone Services PMI Business Activity Index was 53.3, also an 11-month high compared to 51.5 in March.
- A recovery in the services sector will drive growth in April, despite increasing price pressures.
comment From HCOB
Commenting on the PMI data, Dr Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said:
“This is pretty good. The service provider has now expanded its activity for three consecutive months, putting an end to the lack of dynamism seen in the second half of last year. Encouragingly, we are seeing an increase in new business and orders. Employment is increasing at a faster pace, with orders increasing by the most in 11 months. These trends are fueling optimism among service providers. That sentiment is further reinforced by business expectations, which are currently at a much higher level than the average of the past two years.
“Productivity has become a critical challenge for the services industry and the ECB. Since the beginning of 2021, and even during the downturn in 2022 and 2023, service providers have consistently expanded their workforce. This suggests that companies facing employee turnover may need to hire multiple employees to maintain the same level of output, indicating a decline in productivity. The PMI index for service sector operating costs, which is comprised of unit labor costs, has continued to rise at a rapid pace over the past 12 months, after rising sharply in 2022.The ECB recognizes this trend. Therefore, it is likely that the Bank will proceed cautiously regarding the scope of interest rate cuts.
“Service companies have been successful in passing on some of the increase in operating costs, indicating an improving demand situation. This means that the market structure is not overly disruptive and is characterized by healthy competition. also means
“Spain has outperformed Germany, Italy and France, and its services PMI continues to outperform its economy by several points. Despite political turmoil, Spain appears to be placing a disproportionate emphasis on tourism. Additionally, the Spanish government has placed less emphasis on austerity measures than other top eurozone countries, meaning the economy will be less hit, according to the IMF.
