Euro zone April business activity grows on strong services demand

Growth in euro zone business activity sped up in April, though less than initially indicated, as robust services more than offset a downturn in manufacturing, according to a survey that also showed inflation was at its lowest in over two years.

HCOB’s Composite Purchasing Managers’ Index (PMI), seen as a good gauge of overall economic health, climbed to an 11-month high of 54.1, below a preliminary reading of 54.4 but up from 53.7 in March.

April was the survey’s fourth straight month above the 50 mark that separates growth from contraction.

The PMI covering the bloc’s dominant services industry hit a one-year high of 56.2, up from March’s 55.0 but again lower than the 56.6 flash estimate.

“The services sector is in robust shape across the euro zone… Italy and Spain are currently the main driving forces,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.

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