Euro area service sector growth slows in April, PMI index drops to 52.8

The euro area services sector continues to see subdued growth. The headline IHS Markit Eurozone PMI Services Business Activity Index dropped to 52.8 in April from March’s 53.3. This hinted at a slightly slower rate of growth. The easing in growth occurred in spite of a rebound in growth in Germany and a return to growth in France. Markedly slower gains in activity were recorded in Italy and Spain.

On the contrary, there was a slight rebound in growth in new business recorded in April, which continue to encourage companies to take on additional workers. The surge in employment in Germany since October 2007 supported the fastest overall rise in euro area service sector employment in six months.

Higher staffing levels signified that companies were able to keep on top of their workload, as underlined by data on backlogs of work that indicated no change since March. However, increasing employment costs helped support another round of input cost inflation in the services economy. Although companies tried to pass on higher costs to clients, the degree of rise was a bit slower than the earlier month.

Lastly, business sentiment amongst service providers continued to be in positive territory in April, and continued to be widely consistent with levels seen in the prior two months.

At 13:00 GMT the FxWirePro's Hourly Strength Index of Euro was neutral at 31.7558 while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 14.3739 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex