Eurozone April final services PMI 50.5 vs 50.3 prelim

Latest data released by Markit – 5 May 2021

  • Composite PMI 53.8 vs 53.7 prelim
The preliminary report can be found here. The final readings reaffirm some modest resilience in the euro area economy, with the services sector returning to growth after seven months of contraction beforehand.

There were solid performances in Spain and France to add to Germany’s robustness since Q1, which is largely aided by its manufacturing sector.

This does add some optimism going into 2H 2021 if vaccinations gather pace and the virus situation is kept under control, paving the way for a summer reopening perhaps.

Markit notes that:

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“April’s survey data provide encouraging evidence
that the eurozone will pull out of its double-dip
recession in the second quarter. A manufacturing
boom, fueled by surging demand both in domestic
and export markets as many economies emerge
from lockdowns, is being accompanied by signs
that the service sector has now also returned to
growth.

“Barring any further wave of infections from new
variants, Covid restrictions should ease further in
the coming months, driving a strengthening of
service sector business activity which should gain
momentum as we go through the summer.

“The intensity of the rebound will naturally depend
on the extent to which Covid restrictions can be
removed – and some measures relating to
international travel are likely to remain in place for
some time to come – but experience in other
countries hints that the bounce in domestic activity
could be strong as pent up demand and savings
power a surge in spending.

“While the revival in the economy is bringing a rise
in inflationary pressures, these so far seem largely
confined to the manufacturing sector, with service
sector costs – which form a major component of the
core inflation measures tracked by the ECB –
remaining only modest.”

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