LONDON, April 23 Reuters Overall business activity in the euro zone expanded at its fastest pace in nearly a year this month as a buoyant recovery in the bloc39;s dominant service industry more than offset a deeper downturn in manufacturing, a survey found.

The divide between services firms and factories was also evident in the country breakdown for Germany and France, the bloc39;s two biggest economies and the only ones to publish preliminary readings of the survey.

HCOB39;s preliminary composite euro zone Purchasing Managers39; Index PMI, compiled by SP Global, bounced to 51.4 this month from March39;s 50.3, well ahead of expectations in a Reuters poll for 50.7 and marking its second month above the 50 level separating growth from contraction.

The euro area economy has returned to growth. The PMI for the services sector rose further in April … However, the picture is clouded by the unexpected decline in the manufacturing index, said Christoph Weil at Commerzbank.

Euro zone economic growth is projected to be 0.2 this quarter and 0.3 in Q3, a Reuters poll published on Monday showed.

The flash services PMI soared to 52.9 from last month39;s 51.5, ahead of all expectations in the Reuters poll which had a median forecast for a more modest rise to 51.8.

But the manufacturing PMI dropped to 45.6 from 46.1, confounding expectations in a Reuters poll for a lift to 46.6. It has been below 50 since mid2022.

An index measuring manufacturing output did, however, nudge up…