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PurchasingB2B

Eurozone survey shows solid economic growth

Purchasing managers' index held steady at 55.2 points in April


April 30, 2018
Purchasing B2B

The EU legislature in Brussels. Image: Thinkstock.

FRANKFURT—A closely watched survey suggests the eurozone economy continued to grow at a solid pace in April but that the pace of expansion has eased in recent months.

Financial information company IHS Markit says its composite purchasing managers’ index—a gauge of activity across the manufacturing and services sectors—held steady at 55.2 points during April. That’s still markedly above the 50 level that marks expansion but it is lower than the 58.8 rate recorded as recently as January.

Chris Williamson, chief business economist at IHS Markit, said Monday that the decline is “neither surprising nor alarming.”

After all, the index points to steady quarterly economic growth of 0.6 percent for the eurozone, rates that it has struggled to achieve over the past few years of crisis.

When will the European Central Bank join the U.S. Federal Reserve and start raising interest rates? This much is clear: It won’t be soon.

Weaker signals from the economy and worries about a possible trade war between the United State and China have left the top monetary authority for the 19 countries that use the euro in no hurry to start withdrawing its monetary stimulus.

That means the central bank key is unlikely to give a definitive answer to whether it might extend its bond-buying stimulus program beyond September.

It also means that the ECB is likely to keep its interest rate benchmark—which influences borrowing costs for businesses and consumers—at zero well into next year.