Business activity in the euro area hit a fresh six-year high in April on strong demand and increasing business prospects, new data showed on Friday.
Flash euro zone composite PMI (purchasing managers' index) came in at 56.7 in April, compared to 56.4 in March. This beat expectations of 56.3 in a Reuters poll of economists. The composite figure measures both the services sector and manufacturing. A number above 50 represents an expansion in the sectors.
The data showed activity in France has outperformed Germany's in April as businesses become more positive about their future. The figures on Friday morning showed activity growing in France at its fastest pace since May 2011. At the same time, there was a slight moderation in Germany, mainly in the services sector where its PMI (purchasing managers' index) fell from 55.6 in March to 54.7 in April.
Despite the optimism in France, the upcoming presidential vote poses the highest near-term risk to their outlook, IHS Markit, who compile the data, said Friday.
"France's elections pose the highest near-term risk to the outlook, but in the lead-up to the vote the business mood has clearly been buoyant. Growth in France has risen above that seen in Germany amid rising optimism about the future," Chris Williamson, chief business economist at IHS Markit, said in a statement.
Speaking on the overall figures, Williamson added: "The euro zone economy has enjoyed a strong start to the second quarter. The April flash PMI is running at a level consistent with 0.7 percent GDP (gross domestic product) growth, up from 0.6 percent in the first quarter. Such strong growth, if sustained, will inevitably lead to upward revisions to economists' 2017 forecasts,."
A weak euro has boosted manufacturing, according to IHS Markit who compile the data, but the services sector have also expanded. This momentum has led to an uptick in employment rates, it said.