Eurozone composite PMI rises in April as business activity expands for 46 straight months

Euro area economic growth accelerated to a 6-year high at the start of the second quarter. This was signalled by the final Markit Eurozone PMI Composite Output Index rising to 56.8 in April, up from 56.4 in March and the earlier flash estimate of 56.7. Activity has expanded for 46 months in a row.

Underpinning growth of economic activity was a strong increase in incoming new business. New orders rose for the twenty-ninth month running, with the rate of expansion staying close to March’s high. Output growth accelerated at manufacturers and service providers, with rates of increase hitting 72-month records in both cases. The slightly sharper expansion was again registered in manufacturing.

National PMI data indicated that Ireland moved back to the top of the output growth rankings, a position it last held in February. Irish economic output increased at the quickest pace in three months. Spain rose to second position, with growth of economic activity at a 20-month high.

The outlook for the economy also remained relatively bright in April, with business optimism about levels of output in one year’s time staying close to March’s series-record high. Rising backlogs of work also suggested that new order growth was sufficiently robust to test capacity and provide a buffer of incomplete work.

"The encouraging picture from the survey data is likely to help raise many forecasters’ expectations of eurozone economic growth in 2017, and will also no doubt add to speculation that ECB rhetoric will turn increasingly hawkish," said Chris Williamson, Chief Business Economist, IHS, Markit.