ROME: Economic growth in the eurozone eased less sharply than first estimated in April, as pickups in Spain and Italy partly offset slowdowns in Germany and France, according to surveys of purchasing managers.
The surveys continue to indicate that the eurozone economy has emerged from a long period of near stagnation, aided by lower oil prices, a weakening euro and strengthened confidence following the European Central Bank’s launch of a new stimulus program.
But they also serve as a reminder that continued fragilities will place a limit on the pace of recovery, including high unemployment, high government and corporate debt burdens, continued problems in banking systems, and weak investment spending
The slowdown may also reflect growing concerns about the Greek government’s ability to repay its debts and remain a part of the currency area. More than three months after winning elections, Greece’s new government remains at loggerheads with its European creditors–led by Germany–over its EUR240 billion bailout program.
Markit, which surveys more than 5,000 businesses across the eurozone, said on Wednesday that its composite purchasing managers index–a measure of activity in the manufacturing and services sectors–fell to 53.9 in April from 54 in March. Markit last month estimated the PMI at 53.5. A reading below 50 indicates activity is declining, while a reading above that level indicates it is increasing.
The surveys indicated that growth is likely to be sustained and businesses hired new workers for the sixth straight month.
They also pointed to a stronger recovery in southern Europe’s two largest economies, Spain and Italy. In the former, activity increased at the fastest pace in 101 months, while in the latter, activity rose at the fastest pace in 10 months.