Growth was recorded in all 22 of the sub-sectors covered by IHS Markit’s European Union sector PMI data in April, though the best performance was seen in sectors which hint at rising capex.
The fastest growth of output at the start of the second quarter was recorded among manufacturers of tech equipment, with producers of machinery and equipment close behind. Both sectors are bellwethers of capital investment spending by companies, and as such bode well for the sustainability of the current upturn.
Economic growth is accelerating in Europe, with the Eurozone PMI hitting a fresh six-year high in April and the UK PMI surveys showing a hat-trick of faster growth in services, manufacturing and construction.
There are signs, however, of the upturn continuing to be subdued by weak consumer spending. Although coming down, unemployment across the region remains at 8%, wage growth is stubbornly subdued and rising prices are eating into households’ spending power. Not altogether surprising, therefore, the weakest growth of the major sectors covered by the PMI data was seen among providers of consumer services for the sixth successive month in April. On one hand, the weak expansion represented an improvement on the slight drop in activity seen in March, in part likely a reflection of a recent upturn in hiring, but the ongoing sluggish trend in the consumer services signifies an important missing element from the upturn.
Healthcare services and tourism & leisure were the worst performing of the 22 sub-sectors in April, with media companies also seeing a substantially sub-par performance.
Producers of consumer goods fared better, but that in part reflected strong export growth, in turn buoyed by the historically weak euro.
Disclaimer: The intellectual property rights to these data provided herein are owned by or licensed to Markit Economics Limited. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markit’s prior consent. Markit shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon.
In no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers' Index™ and PMI™ are either registered trademarks of Markit Economics Limited or licensed to Markit Economics Limited. Markit is a registered trade mark of Markit Group Limited.