Service sector

Eurozone business growth unexpectedly accelerated in April, led by the services sector

Eurozone economic growth accelerated in April as the rebound in the services sector benefited from the easing of COVID-19 restrictions and helped offset the near stall in manufacturing output.

The S&P Global Purchasing Managers’ Index for the eurozone services industry hit an eight-month high of 57.7 in April from 55.6 in March. But the manufacturing PMI fell to a 16-month low at 55.3, from 56.5 in March.

Hiring has also picked up and business expectations for the year ahead have risen from March’s 17-month low, although confidence remains subdued as concerns over the war in Ukraine, rising prices and the effects Persistent signs of the pandemic continued to dampen optimism, particularly in the manufacturing sector, Chris Williamson, chief economist, S&P Global Market Intelligence, said on Friday.

Prices charged for goods and services meanwhile rose at an unprecedented pace in April amid another near-record rise in business costs, suggesting inflation has yet to rise.

The S&P Global Eurozone PMI Composite Output Index fell from 54.9 in March to 55.8 in April, according to the preliminary “flash” reading, signaling the highest rate of expansion since last September and confounding consensus expectations for a slowdown in the economy during the month. The latest reading broadly indicates that GDP is growing at a solid quarterly rate of just under 0.7%.