- Previously 51.5
- Manufacturing PMI 45.6 vs expected 46.6
- 46.1 and earlier
- Composite PMI is 51.4 vs. expected 50.7
- 50.3 and earlier
Service printing is at its highest level in 11 months, but manufacturing printing is at its lowest level in four months. But even with that in mind, the eurozone economy is expected to expand in April at the fastest pace in almost a year. Although economic conditions are at least improving, price pressures are expected to increase slightly this month. HCOB points out:
“The Eurozone got off to a strong start in the second quarter. The composite HCOB Flash PMI made significant strides into expansion territory. This was driven by the services sector, where activity is gaining further momentum. Our GDP forecast, which takes into account a variety of factors including the HCOB PMI, suggests a 0.3% expansion in Q2, which is in line with Q1 growth (both QoQ) .
“Several factors indicate that the recovery in the private services sector, which dominates the overall economy, is poised to sustain. First, there has been positive momentum in new business over the past two months, leading to more bold Second, higher production prices are not only a response to rapidly rising input costs, but also reflect service providers' pricing confidence. Finally, the two most important economies in the euro area, Germany and France, are experiencing simultaneous recoveries because of common factors such as lower inflation and higher wages, which strengthen purchasing power. This suggests that it is contributing to the revival of the service sector.
“The PMI figures are poised to test the ECB's willingness to cut interest rates in June. The accelerating rise in input costs will likely be driven not only by higher oil prices but, more worryingly, by rising wages. At the same time, companies in the service sector are raising prices at a faster pace than in March, raising expectations that service inflation will continue. Regardless, we expect the ECB to cut rates in June, but we doubt the central bank will adopt the “realistic speed” suggested by the ECB's François Villeroy de Galault. Rather, a more cautious approach is expected.
“What can be said for euro area manufacturing is that job losses have eased slightly, with production falling at the slowest pace in a year in April. Otherwise, new business has declined rapidly along with the backlog of orders. The situation remains quite bleak. The weak demand for industrial goods is evidenced by the sharp decline in the amount of raw materials being purchased and the lack of improvement in the inventory cycle. expects a recovery by the middle of this year, but it is important to consider the structural factors affecting the sector. is likely to be an important factor in this regard.”
