Despite some ambiguity around the turning points, the European economy is showing signs of improvement. In May, the economic sentiment indicator increased from 95.6 to 96, indicating that modest growth will continue in the second quarter of 2024. The manufacturing sector has stabilized, and the service sector continues to grow. This marks a positive development compared to the stagnant economy of 2023.
The data shows that improvements in sentiment for both industry and services have driven this increase in sentiment indicator. Manufacturing production trends improved, and demand for services also saw an uptick compared to April. Additionally, selling price expectations in services are trending down, indicating that domestic inflation is likely to moderate further.
Overall, these indicators point towards a positive outlook for the eurozone economy. With continued modest growth expected in the coming months, it would signify a clear break from the economic stagnation experienced in 2023.
In summary, although there is still some ambiguity around turning points, recent data suggests that modest growth will continue in the second quarter of 2024 as both manufacturing and service sectors stabilize and continue to grow respectively.
