The recovery of economic activity in the eurozone accelerated in March, supported by the services sector which compensated for the stagnation in industry, a survey by S&P Global.
The Purchasing Managers’ Index (PMI) in the eurozone’s private sector rose by 1.7 points in March compared to February, reaching 53.7 points, the highest level since last May.
Values above 50 points indicate growth in activity, while those below indicate a decline.
– The recovery of the eurozone economy continues from the lull at the end of 2022, and the latest PMI survey will support views that the eurozone has avoided recession, at least for now – said S&P Global’s senior economist Joe Hayes.
The engine of the economy in the area of the common euro currency was also the services sector in March, with a growth rate significantly above the long-term average. Activity in industry also increased, but marginally, S&P Global found.
– A stronger momentum (in the services sector) is encouraging given the pressure on household incomes created by high inflation and rising borrowing costs – Hayes said.
S&P Global also highlights differences among member countries, with activity in Spain rising sharply, followed by Italy. Germany and France recorded only slight growth.
Demand strengthened again, for the second consecutive month, but was limited to the domestic market while orders from abroad fell again, extending the downward trend to a full year.
Price pressures have eased, primarily due to the industry which recorded a decline in input costs for the first time since July 2020.
Business leaders remain optimistic about business forecasts for the next 12 months, but the index of their expectations has slightly fallen, despite the improved level of activity and demand, warns S&P Global.
