A nascent recovery in euro zone business activity continued on Wednesday with data managing to beat analysts’ expectations, despite slower growth in France and fears of falling prices weighing on sentiment.
Markit’s flash purchasing managers’ index (PMI) for April revealed that the euro zone’s composite index rose to 54.0, up from 53.1 in March. A reading above 50 marks an expansion in the private sector.
The data was driven by strong growth in Germany, with the composite number rising to 56.3 in April, from 54.3 in March. France saw slower growth in its private sector, but output rose for a second month with a figure of 50.5, down from March’s 51.8 reading. Output in the euro zone’s second-largest economy was hit by new orders in manufacturing, which stagnated after rising in March. This caused French firms to once again cut back on their staffing levels, according to Markit, the London-based research company that collates the data.
The data provided proof that French growth was still “fragile”, according to Howard Archer, an economist at IHS Global Insight. This was in marked contrast to the “robust” expansion he suggested the German numbers indicated.