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Eurozone output growth stabilises in April

Eurozone output growth stabilises in April

Mubasher: Eurozone business activity maintained a steady pace in April, despite expanding at a notably slower rate than earlier in the year.

The slower inflows of new orders indicate a possible further slower growth in May, the IHS Markit flash survey data showed on Monday.

The IHS Makit Eurozone purchasing managers’ index (PMI) was unchanged at 55.2 in April, the weakest level of business expansion since the beginning of 2017.

“The unchanged reading indicated the joint-weakest expansion of business output since the start of 2017, but remained well above the average of 53.8 seen over the past five years,” the report stated.

Meanwhile, manufacturing registered an increase, despite having the slowest growth in factory output in 17 months.

The services sector registered a marginally faster growth rate than that seen in March which had then logged a seven-month low. The sector’s new business inflows slipped to the lowest level in eight months, “adding to signs of a broad-based waning of demand growth both at home and in export markets.”

The output growth of the two sectors dropped sharply, after reaching their 11-and-a-half year high earlier this year, which is “in line with a slowdown in order book growth,” according to the data.

Meanwhile, the Eurozone’s employment rate increased during April, with jobs created at a historically “elevated rate.”

Service sector job creation was at its highest since October 2007, whereas factory hiring slowed in April.

For a year and half, the smallest gains were in total goods orders and export orders, with the latter being partially lesser due to the recent increase in the euro against the US dollar.

By 10:23 am GMT, the EUR/USD pair dropped by 0.47% to $1.2230.