Eurozone: Composite PMI hits six-year high in April

Leading data suggest that the Euro area’s economic recovery continued to gather steam in April. The preliminary Eurozone Composite Purchasing Managers’ Index (PMI), produced by IHS Markit, rose from March’s 56.4 to 56.7 in April, the best result since April 2011. The result overshot market analysts’ expectations of 56.3.

April’s reading reflected widespread optimism among firms and new order growth in the manufacturing sector hit a multi-year high. An improving global economic backdrop drove orders from abroad to grow at the fastest pace since April 2011. Job creation was also strong, with the manufacturing sector adding jobs at the fastest pace since 2000. Meanwhile, price pressures were elevated in April amid rising commodity prices and a weak euro.

Regarding the two largest Eurozone economies, economic conditions improved in France and the PMI came in at the highest level since May 2011. However, conditions moderated in Germany, although they remained strong. Elsewhere in the region, economic momentum picked up and output grew at the fastest pace since July 2007.

FocusEconomics Consensus Forecast panelists expect the Eurozone economy to expand 1.5% in 2017, which is unchanged from last month’s forecast. For 2018, panelists expect the economy to grow steadily at 1.5%.