Eurozone Private Sector Growth At 11-Month High

Eurozone Private Sector Growth At 11-Month High

Friday 21st April 2023 – 09:35 (BST)

According to a preliminary estimate from HCOB, the Eurozone Composite PMI rose to 54.4 in April 2023 – the highest since May last year and well above market expectations of 53.7. This indicates that the bloc’s economy has gained further momentum at the start of the second quarter, driven by the steepest increases in both new orders and employment within the private sector.

The news follow data earlier today that showed German business growth activity reached a 12-month high during April. Germany’s Composite PMI surged to 53.9  – beating market forecasts of 52.7 and mainly driven by a sharp increase in service sector output.

Conversely, Eurozone business optimism about the year ahead dipped further from February’s 12-month high, indicating that businesses remain cautious about the overall economic outlook within the region.

Euro demand immediately increased on the back of the news, with both GBP/EUR and EUR/USD moving 0.5% as the currency continues its strong start to Q2.

Elsewhere, inflationary pressures moderated further in April across Europe with input cost inflation falling to the lowest since February 2021 and the average price inflation dropping to a two-year low. This will come as a relief to ECB policymakers who have been concerned about rising inflation in for some time.