Eurozone business activity at six-year high in April

Eurozone business activity expanded at a faster rate than initially estimated in April, according to data released on Thursday.

IHS Markit's final eurozone composite output index - which measures activity in the manufacturing and services sectors - rose to 56.8 from a flash estimate of 56.7 and 56.4 in March. This marks a six-year high and the 46th month in a row of expansion. A reading below 50 indicates contraction.

Meanwhile, the services business activity index printed at 56.4, up from the flash estimate of 56.2 and March's reading of 56.0.

The German services PMI came in at 55.4, down from 55.6 in March, while the French services PMI slipped to 56.7 in April from 57.5.

The composite German PMI rose to 56.7, up from a flash estimate of 56.3, while the French composite PMI printed at 56.6 compared to a flash estimate of 57.4.

Chris Williamson, chief business economist at IHS Markit, said: "With the final reading coming in slightly above the earlier flash estimate, the PMI surveys portray an economy that is growing at an encouragingly robust pace and that risks are moving from the downside to a more balanced situation.

“The April Eurozone PMI is historically consistent with a GDP growth rate of 0.7%, with similar rates of expansion signalled for both Germany and France. Even faster gains are being indicated in Spain and Ireland and Italy is also seeing growth perk up, highlighting the increasingly broad-based nature of the current upturn."

Pantheon Macroeconomics said: "A higher than expected services PMI in Germany was the key driver of the marginal upside surprise in the eurozone headline, offsetting a weaker reading in France compared with the first estimate.

"Overall, the PMIs signal strong GDP growth in both economies. The data also were strong in Spain and Italy. The Italian services PMI jumped to 56.2 from 52.9 in March, which lifted the composite index to 56.8. In Spain, the composite index rose to a solid 57.3, from 56.8 in March. In short, the PMIs signal that the Eurozone private sector is firing on all cylinders. New business growth is firm, employment is rising and inflation pressures are firming."