Eurozone: Composite PMI hits almost six-year high in March
March 24, 2017
Leading data suggest that the Euro area’s economic recovery continued to gather steam in March. The preliminary Eurozone Composite Purchasing Managers’ Index (PMI), produced by IHS Markit, rose from February’s 56.0 to 56.7 in March, the best result since April 2011. The result confounded market analysts’ expectations, who had expected the index to fall to 55.8.
March’s reading reflected strong activity in both the services and manufacturing sectors. Staffing levels in the Eurozone grew at the fastest pace seen in almost ten years as manufacturers and service providers responded to soaring order books. Outstanding demand in both sectors prompted backlogs of work and new orders to increase at the strongest rate in almost six years, fueling widespread optimism among businesses. Upbeat momentum and sizeable cost-inflation pressures prompted an increasing number of firms to roll over higher costs onto customers, with both input and output prices rising at the fastest pace in over five years.
Regarding the two largest Eurozone economies, economic conditions improved in both France and Germany. Elsewhere in the region, economic momentum was broadly steady while job creation hit the highest result in nearly ten years. Commenting on the result, IHS Markit analysts stated that, “the March flash PMI rounds off the best quarter for six years and signals GDP growth of 0.6% in the first quarter.”