Euro-zone Business Activity Surges to 11-Month High

26 Apr, 2024

Euro-zone Business Activity Surges to 11-Month High

Business activity in the euro zone has surged, marking its fastest expansion in nearly a year, signaling a potential emergence from recent economic stagnation, as per a widely observed survey of companies. The growth in the services sector compensated for manufacturing weaknesses, propelling S&P Global’s monthly index of euro-zone corporate activity for April above the expectations of most economists.

Concurrently, price pressures heightened as services firms transferred increased wage costs to consumers. The flash composite purchasing managers’ index (PMI) for the euro zone, a key indicator for policymakers to assess economic trends, soared to an 11-month peak of 51.4 in April, up from 50.3 the previous month. This figure surpassed the 50.8 forecasted by economists surveyed by Reuters. The survey results are likely to offer reassurance to officials at the European Central Bank (ECB) regarding the euro zone's trajectory, potentially averting a recession while maintaining a steady decline in inflation towards the ECB's 2 per cent target.