Eurozone business activity expanded in April at the fastest rate in almost a year. At 51.7, the final composite output index was 0.3 points stronger than its flash estimate and 1.4 points above its final print in March. That said, the latest outturn was still only indicative of modest overall growth.

The positive headline revision was largely due to services where the 52.9 flash sector PMI was revised up to 53.3, also an 11-month peak and nearly two points firmer than its final March outturn. The improvement here came courtesy of a second successive and accelerated rise in new orders. Indeed, growth here was the strongest since last May and robust enough to prompt the first gain in backlogs in 10 months. In turn, this led to the largest increase in new jobs since the middle of last year. Business confidence about the year ahead was slightly weaker than March's 25-month high but still strong and in line with the long-run average.

Less promisingly, inflationary pressures were more marked with the input cost rate rising from March's 8-month low and output prices also climbing at a more rapid pace.

In terms of national composite output indices, the best performing member state was Spain (55.7) which was well ahead of Italy (52.6). Also, just on the right side of 50 were Germany (50.6), France (50.5) and Ireland (50.4).

Taken at face value, the final results suggest that the Eurozone economy is gradually picking up momentum albeit confined to services and that faster growth is underpinning potentially inflationary wage gains. A cut in interest rates in June still looks very probable but beyond that the monetary easing path is much less clear. Today's update leaves the region's RPI at minus 3 and the RPI-P at 8. Economic activity in general is broadly performing as expected.

No revisions are expected leaving the key composite output index at 51.4, up from March's final 52.9.

The Composite Purchasing Managers' Index (PMI) provides an estimate of private sector output for the preceding month by combining information obtained from surveys of the manufacturing and service sectors of the economy. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster is output growing (contracting). The report also contains the final estimate of the services PMI. The data are provided by S&P Global using a representative sample of around 5,000 manufacturing and services companies, the former including Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece and the latter Germany, France, Italy, Spain and the Republic of Ireland.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.