Euro Area: Business activity expands at the fastest pace in 11 months in April

Euro Area PMI April 2023

Euro Area: Business activity expands at the fastest pace in 11 months in April

The flash Eurozone Composite Purchasing Managers’ Index (PMI) rose to 54.4 in April from 53.7 in March, hitting an 11-month high. Consequently, the index moved further above the 50 no-change threshold, signaling a stronger improvement in business conditions compared to the prior month.

April’s increase was led by a faster expansion in the services sector more than offsetting a downturn in manufacturing activity. Output and new orders rose at sharper paces in the services sector, while the manufacturing sector experienced a decline in new orders. Similarly, the pace of job creation decelerated in the manufacturing sector but sped up in the services sector. Meanwhile, business confidence weakened but remained comfortably above the levels seen late last year.

On the price front, input inflation fell—especially in the manufacturing sector—thanks to a further easing of supply constraints and cooling demand. Consequently, output inflation decelerated notably, although it remained elevated, particularly in the services sector.

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