Eurozone economy picks up as manufacturing booms amid COVID-19
Brussels, Belgium - The eurozone economic recovery accelerated in April despite coronavirus restrictions as business activity grew at its fastest pace since the summer thanks to a manufacturing boom, according to a key survey.
‘Eurozone business activity grew at a stronger rate in April, the rate of increase accelerating to the fastest since last July as a record expansion of manufacturing output was accompanied by a return to growth in the service sector for the first time since last August,’ economic data group IHS Markit said.
The firm’s PMI index rose to 53.7 points in April from 53.2 in March, remaining above the 50point level that indicates growth.
It marked a second straight month of expansion in business activity after four consecutive months of decline.
“In a month during which virus containment measures were tightened in the face of further waves of infections, the eurozone economy showed encouraging strength,” Chris Williamson, chief business economist at IHS Markit said.
“Although the service sector continued to be hard hit by lockdown measures, it has returned to growth as companies adjust to life with the virus and prepare for better times ahead.”
Williamson added that the manufacturing sector was booming as ‘pent-up spending, restocking, investment in new machinery and growing optimism about the outlook have all helped fuel a further record surge in both output and new orders’.
Factories in economic powerhouse Germany led the way as manufacturing expanded across the region ‘at a rate unsurpassed in over two decades of survey history’.
The hard-hit service sector continued to trail behind however, as countries imposed restrictions to try to curb a third wave of coronavirus infections.
Germany’s return to growth in the sector ground to halt as tighter measures were enforced, but France and much of the rest of the eurozone saw a ‘marginal’ uptick for the first time since last summer. The more positive news comes as vaccination drives across the European Union pick up pace after a sluggish start caused in part by delivery shortfalls.