(Bloomberg) — The Eurozone economic recovery picked up further momentum in April as services sector activity resumed, but the business outlook remains resilient to recent stress in the banking sector. there is
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Increased demand and strong job growth fueled growth to an 11-month high, according to S&P Global’s business survey. Price pressure eased again.
However, development has become increasingly uneven as manufacturers have seen a further decline in orders for their goods, while service outperformance was the highest since 2009.
Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said the data “offer a very positive picture of an economy that continues to recover”, adding that “on the one hand it is partially booming”. The gap between the presenting service sector and the weakening manufacturing sector,” he added. Meanwhile, the sector is expanding further. ”
The eurozone may narrowly avoid a recession this winter as countries sidestepped the energy shortages feared after Russia invaded Ukraine and curtailed gas supplies to the eurozone. Economists expect a modest recovery for the rest of the year, but inflation remains a concern.
Inflation pressures cooled in April, but input costs remained high relative to historical levels, especially in the services sector, where rising wages pushed input costs up sharply. The European Central Bank looks to these underlying price movements to determine how much to cover the cost of borrowing.
De la Rubia said “neither input nor selling prices have shown a significant slowdown” in the sector. “This increases the likelihood that the ECB will tighten monetary policy further or for longer.”
Protests and strikes against the pension reforms passed by Emmanuel Macron’s government have caused some French companies to cut part of their manufacturing output, according to S&P Global.
READ MORE: Eurozone’s top economy sees services surge, French factories hurt
Business outlook was “pretty positive” thanks to easing energy concerns, improving supply chains and hopes that inflation has passed its peak.
The UK and US PMI readings for the second half of Friday are all projected to show expansion. Earlier data revealed a slight slowdown in activity in Japan, but it remains strong. Australia’s gauge showed a return to growth.
–With help from Mark Evans and Joel Rinneby.
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