MNI: EMU Composite PMI Broadly Unchanged In April

-CIPS/IHS Markit EMU Composite PMI 55.1 in April Vs 55.2 in March

By Jamie Satchi

     LONDON (MNI) - Overall economic activity in the Euro area continued to

expand at a robust pace in April, with solid growth in both the manufacturing

and services sectors, data from the IHS Markit/CIPS survey showed.  

     The EMU Composite Purchasing Managers' Index (PMI) fell by a tenth of a

point to 55.1 in April, below the March outturn and flash April estimate of

55.2. 

     The headline index has now signalled expansion in the each of the past 58

months and despite sitting above the average over this period of time, April's

outturn was the weakest since January 2017. 

     Driving the month's result was a slowdown in service sector growth, easing

to an eight-month low, offset by a slight strengthening in manufacturing growth.

     --EUROZONE SERVICES OUTPUT SLOWS

     Published alongside the composite index, the services index pointed to a

marginal in sector activity. The EMU Services Purchasing Managers' Index (PMI)

fell to 54.7, down from March's 54.9. The April flash estimate had earlier

pencilled in a pickup in activity, albeit minute, looking for a 0.1 point rise

to 55.0.   

     --FRANCE, IRELAND LEAD THE WAY

     Breaking down growth by country, France and Ireland were the only two major

economies judged to have grown at a faster pace in April. Their respective

composite indices hit 56.9 (a 2-month high) and 57.6 (a 3-month high), while

Spain, Germany and Italy each saw a moderation in the pace of expansion. 

     In Germany, both the services and composite indices fell to 19-month lows.

The services index fell 0.9 points to 53.0 while the composite measure lost 0.5

points, settling at 54.6. 

     --EURO AREA DEMAND SLOWS

     The weaker growth of eurozone economic output reflected a tandem slowdown

in the rate of expansion in incoming new business. New orders rose at the

slowest pace for 15 months but remains solid. Growth eased in both the

manufacturing (17-month low) and service (eight-month low) sectors.

     --EMPLOYMENT UP

     Despite the moderation in new orders, intake of new work was still strong

enough to test existing capacity, as indicated by a further rise in outstanding

business and hiring intentions in April. 

     Job creation registered for the forty-second month in a row. The pace of

growth also ticked higher and remained among the best seen over the past decade.

     --INPUT PRICES EASE

     Price pressures continued to soften in April, with rates of increase in

input costs and output charges easing to respective seven-month and four-month

lows.

     Input price increases remained elevated nonetheless, reflecting "high raw

material costs", induced by excess demand, and "growing staff costs".

     --FURTHER WEAKNESS EXPECTED

     "Despite the drop, the PMI is not yet at a worryingly low level, but the

survey details hint at further easing in the coming months," said Chris

Williamson, Chief Business Economist at IHS Markit.

     Williamson cited the slowdown in two forward looking indicators, order

backlogs and future output expectations, which fell to eight-month and

five-month lows respectively, as enough to warrant the prospective slowdown.    

     He did, however, add that despite the weakening, the surveys remained

indicative of robust growth that point to the "eurozone economy growing at a

robust quarterly rate of approximately 0.5-0.6%".  

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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