Business activity in the euro zone expanded again in April, preliminary data showed on Friday, providing some positive momentum for the second quarter.
European countries have stepped up their vaccination rates, but some nations remain in lockdown amid a third wave of Covid-19 infections.
IHS Markit’s flash composite PMI for the euro zone, which looks at activity across both manufacturing and services, hit 53.7 in April versus 53.2 in March. A reading above 50 represents an expansion in economic activity.
Chris Williamson, chief business economist at IHS Markit told CNBC that “containment measures to fight coronavirus were actually tightened and normally we would expect the pace of economic activity to weaken but it has done the opposite.”
He added that companies were optimistic about the future and preparing for better times ahead.
Analysts are also somewhat optimistic for the coming months as governments prepare to ease some of Covid lockdown measures. Italy is opening parts of the economy on Monday, France is considering a cautious reopening from mid-May and Greece has plans to open around that time too.
Going forward, Williamson said: “There is going to be a switch between spending on goods and spending on services.”
Speaking on Thursday, European Central Bank President Christine Lagarde said: “Incoming economic data, surveys and high-frequency indicators suggest that economic activity may have contracted again in the first quarter of this year, but point to a resumption of growth in the second quarter.”
She added, however, that there is an “overall environment of uncertainty” regarding the economic outlook.
