Business activity across the eurozone showed early signs of stabilization in March, according to a high-profile survey released on Thursday.
Latest H.C.O.B. The preliminary Eurozone Composite PMI Production Index was 49.9, the highest level in nine months, and improved from February's 49.2.
It was only slightly below the neutral level of 50.0. A number below 50.0 indicates contraction, and a number above 50.0 indicates growth.
Among these, the services PMI business activity index rose from 50.2 to 51.1, and the manufacturing PMI production index rose from 46.6 to 46.8.
The survey also showed that business confidence for the coming year has improved to a 13-month high, while the decline in order backlogs is slowing.
However, the eurozone manufacturing PMI fell from 46.5 to 45.7. Germany and France, the region's largest economies, also saw significant production declines.
Cyrus de la Rubia, Chief Economist hamburg commercial bank“If you were hoping for a recovery in the manufacturing sector in the first quarter, it's time to give up.'' March's PMI confirms the clear weakness in the sector, which is dominated by the dominant country Germany. It seems like they are doing so.”
“However, there is a glimmer of hope. Businesses remain optimistic about future production. Additionally, the finished goods inventory index has risen for the second consecutive month.”
Ricardo Amaro, Chief Economist oxford economics“Given the persistence of PMI bias since the pandemic, we don't think today's results should be taken too literally.
“However, PMI remains a useful barometer of progress and is consistent with the most frequent indicators of improving growth momentum, even from a low base.”
Bart Collin, Senior Eurozone Economist ING“While the rise in PMI is encouraging, we cannot yet expect a significant recovery in GDP growth in the first quarter,” he said.
“Still, the services sector is gaining momentum. Business activity is gradually recovering and businesses are becoming more optimistic about the outlook.”
“The European Central Bank's interest rate outlook will largely depend on how wage growth and services inflation develop.
“While the first quarter remains a difficult challenge for the euro area economy, green shoots are emerging. GDP growth has been more or less stagnant since the second half of 2022, but is expected to recover cautiously in the summer. Expect.”
Data was collected from March 11th to 19th.
