The private business sector in the Eurozone continued to show signs of recovery in April, with activity rising to an 11-month high, according to a preliminary report by S&P Global and Hamburg Commercial Bank (HCOB) on Tuesday. The composite Purchasing Managers' Index (PMI) rose to 51.4 from 50.3 in March. The services PMI grew to 52.9 from 51.5, while the manufacturing index fell to 45.6 from 46.1 in March.
Output and demand both increased in April, as did employment, driven by a ten-month high rate of employment growth in the service sector. The report also noted price pressures grew slightly, with inflation up for both input costs and average selling prices. "The PMI figures are poised to test the [European Central Bank's] willingness to cut interest rates in June. Accelerated increases in input costs, likely driven not only by higher oil prices but also, more concerningly, by higher wages, are a cause for scrutiny," HCOB Chief Economist Cyrus de la Rubia said, concluding that the ECB is still likely to cut rates in June but remain cautious.
