Eurozone PMI


Eurozone PMI climbs to highest level in nearly four years

The flash estimate of the Markit Eurozone PMI Composite Output Index came in at 54.1 in March. The reading was above the revised 53.3 recorded in February (previously reported: 53.5) and smashed the 53.6 that the markets had expected. March’s result represented the fourth consecutive increase in the gauge, which also climbed to its highest level in nearly four years, rising further above the 50-threshold that separates expansion from contraction in business activity in the common-currency area.

The strong reading was driven by notable rises in the manufacturing and services sectors, particularly the services sector, which also picked up to the highest level in almost four years. According to Markit, the acceleration in business activity was propelled by faster growth in new orders and a stronger increase in both in business activity and manufacturing output. Meanwhile, employment rose over the previous month and was more noticeable in the manufacturing sector.

Markit concluded that the strong improvement observed in the March PMI provides, “welcome news to a region awaiting signs that the ECB's quantitative easing is stimulating the real economy.” Markit added the economy “looks to have expanded by 0.3% in the first quarter, buoyed by a 0.4% expansion in Germany and signs of a long-awaited recovery in France.”

At a country level, Germany’s composite PMI rose in March to the highest point in eight months. Meanwhile, France’s composite PMI continued to signal an expansion in business activity for the second month in a row, although the pace of growth moderated over the previous month. Excluding Germany and France, the composite PMI for all the other countries in the region rose to the highest level since July 2014.

FocusEconomics Consensus Forecast panelists expect the economy to expand 1.1% in 2015, which is down 0.1 percentage points from last month’s forecast. For 2016, panelists expect the economy to expand 1.5%.


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Eurozone PMI Chart

Euro PMI March 2015

Note: Markit Purchasing Managers’ Index (PMI) Composite Output. A reading above 50 indicates an expansion in business activity while a value below 50 points to a contraction
Source: Markit

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