SPEU - Eurozone PMI Signals A Pickup In Growth

2024-04-24 08:30:00 ET

Summary

• The PMI increased from 50.3 to 51.4 in April, suggesting that the eurozone economy is finally leaving stagnation and returning to growth at the start of the second quarter.
• Inflationary pressures remain for the service sector, but don’t expect this to deter the ECB from cutting rates.
• Expect services to continue to lead the recovery as weak global demand offsets improvements in domestic real wages for eurozone manufacturers.

By Bert Colijn

The eurozone economy is slowly getting out of its slump. The April PMI shows that the economy is gearing up for an acceleration in activity after a year and a half of broad stagnation. The services sector is doing the heavy lifting in this acceleration of activity. The manufacturing sector continues to signal declining output, although there are some visible signs of bottoming out. Still, expect services to continue to lead the recovery as weak global demand offsets improvements in domestic real wages for eurozone manufacturers....

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