FX.co ★ Eurozone Private Sector Growth Improves On Services Strength

Euro area private sector logged its strongest expansion in seven months in April as the relaxation of pandemic-related restrictions boosted services growth, final data from S&P Global showed on Wednesday.

The S&P Global composite output index rose to 55.8 in April, in line with flash estimate, from 54.9 in March. The score signaled the strongest growth since September 2021.

That said, the improvement in the headline figure masked widely divergent trends at the sector level, with data revealing sharp services activity growth but a sluggish increase in manufacturing output.

The services Purchasing Managers' Index came in at an eight-month high of 57.7 in April, as estimated, from 55.6 a month ago. The sector gained strength after virus containment measures were relaxed.

The survey data are consistent with GDP rising at a quarterly rate of around 0.7 percent at the start of the second quarter after signaling a 0.4 percent rise in the first quarter, Chris Williamson, chief business economist at S&P Global said.

By country, latest survey data showed France as the fastest-growing monitored eurozone constituent. The French private sector posted its sharpest expansion in over four years in April.

Quicker upturns were also seen in Spain and Italy, while Germany bucked the trend as growth here slowed to a three-month low.

Germany's private sector growth slowed in April due to the weakness in manufacturing. The composite output index fell to 54.3 in April from 55.1 in the previous month. The flash reading was 54.5.

The services PMI climbed to 57.6 in April from 56.1 in the prior month. This was the fastest growth since August last year but was below the flash 57.9.

France's private sector posted the fastest expansion since the start of 2018, underpinned by both services and manufacturing sectors. The composite output index came in at 57.6 in April, up from 56.3 in March and the flash score of 57.5.

The services PMI improved to 58.9 in April from 57.4 in March and marked a third successive increase in the headline figure and also signaled the strongest rise since the beginning of 2018. The flash reading was 58.8.

Italy's private sector registered a fifteenth successive monthly upturn in private sector output and one that was the fastest of the year so far. The composite output index advanced to 54.5 in April from 52.1 a month ago.

Stronger growth was driven by the service sector, which saw the quickest upturn in output for five months, while growth of factory production eased to a 22-month low amid severe supply issues. The services PMI stood at 55.7 in April versus 52.1 in March and well above economists' forecast of 54.5.

Spain's private sector growth improved in April and extended the current sequence of expansion to three months. The composite PMI posted 55.7, up from 53.1 in March. Services output grew sharply, while manufacturing production registered the weakest growth in 15 months. The services index came in at 57.1 compared to 53.4 a month ago.