Eurozone business growth loses momentum in April

Eurozone business growth loses momentum in April

Mubasher: Preliminary estimates for the Eurozone suggested that economic activity remained in its weakest growth spell since 2014, extending a slowdown for the second month in a row in April.

The IHS Makit Eurozone purchasing managers’ composite index (PMI) was at 51.3 in April, edging down from 51.6 in March, according to the IHS Markit survey data on Thursday.

This marked the third weakest level since November 2014, while it was fractionally above the lows seen in December 2018 and January.

New business inflow gained a slight momentum, as new export orders fell sharply, for the seventh month in a row, “[continuing] the worst period of export performance since comparable data covering both goods and services were first available in 2014,” according to the survey data.

Manufacturing business remained in the contraction territory in April, while service sector saw an easing expansion rate.

The PMI gauging activity in the manufacturing sector registered the highest level since two months at 48.1 in April, compared with 47.2 in the prior month.

The flash PMI for service business activity inched down to 52.5, its lowest level in three months in April, compared with 53.3 in the prior month.

“The data add to worries that the economy has failed to rebound with any conviction from one-off factors that dampened activity late last year, and continues to show only very modest growth in the face of headwinds from slower global demand growth and subdued economic sentiment,” IHS Markit’s chief economist Chris Williamson said.

Eurozone business backlog of work shrank, but the decline was marginally smaller than the fall seen last March, which was the steepest since December 2014.

Employment picked up a little, but stood at the lowest level since 2016, due to a frequent reluctance among businesses to hire more staff against the backdrop of weak demand and uncertain outlook.

Business optimism regarding the conditions in the year ahead remained at one of the dimmest since late 2014.

By 8:52 am GMT, the EUR/USD pair fell 0.35% to $1.1257.