The private sector in the euro area experienced accelerated growth in April, recording an 11-month high, largely driven by the services sector, according to the final survey results published by S&P Global.
In April, the HCOB composite output index rose to 51.7, up from 50.3 in the preceding month, surpassing the preliminary estimate of 51.4. This is the second consecutive month where the score has surpassed the 50.0 mark, indicating growth rather than contraction. The service sector was solely responsible for this improvement as manufacturing output continued to decline.
New orders saw an increase for the first time since May of the previous year, despite a steeper fall in goods demand, as service companies experienced more new businesses. Supporting this higher output level was a backlog of work. There is an overarching positive outlook that business activities will continue to rise in the approaching year.
Companies are augmenting their workforce since the beginning of the year and the growth rate is the most pronounced since mid-2023. The data also revealed rising inflationary pressures with increased input costs and output charges over their respective series averages.
The HCOB services PMI moved upward to 53.3 in April from 51.5 in March, outpacing the preliminary estimate of 52.9. This rise signified the most robust expansion in service activities in almost a year.
Economic growth in Spain continues to lead, reaching a one-year high. The composite output index increased to 55.7 in April from 55.3 the previous month. Meanwhile, the services PMI registered at 56.2, slightly up from March's 56.1.
Despite a deceleration, Italy experienced its fourth month of consecutive growth. The composite index was recorded at 52.6, down from 53.5 in the previous month. Likewise, the services PMI slid to 54.3 from 54.6.
For the first time in ten and eleven months, respectively, Germany and France demonstrated growth. Indicating moderate growth, Germany's final HCOB composite output index came in at 50.6, an increase from 47.7 in March, and a notch over the preliminary score of 50.5. The final services PMI climbed to a 10-month peak at 53.2 from 50.1 in March, albeit slightly below the anticipated 53.3.
France's final composite PMI recorded 50.5 in April, which is an uptick from March's 48.3 and the expected 49.9. The final services PMI showcased more growth than projected, at 51.3, up from March's 48.3, surpassing the anticipated 50.5.
