Euro Zone Business Activity Hits New Heights in March!

On March 24, we learned that businesses in the Euro zone are doing better than they have in the past seven months. This is partly because the long-lasting problems in manufacturing are starting to improve, even though the growth in services is a bit slower. Experts are hopeful that things could get even better soon, especially since Germany is planning to spend more on infrastructure and defense, which could help boost the economy.

According to a new survey by HCOB and S&P Global, the composite Purchasing Managers’ Index (PMI) for the Euro zone ticked up to 50.4 in March from 50.2 in February. This is the best score since August. The index has stayed above 50, which means growth, since the beginning of this year. However, the growth is still quite small, and it didn’t reach the expected 50.8.

In the services sector, the index fell slightly to 50.4 from 50.6, missing predictions of 51.0. On the bright side, manufacturing seems to be improving after almost three years of decline, with its PMI rising to 48.7 from 47.6 in February. This was better than the expected 48.2. For the first time in two years, factory output showed growth, jumping to 50.7 from 48.9.

Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, noted that spring might be bringing some positive signs for manufacturing, mentioning that output has increased for the first time since March 2023. While companies are facing higher costs and are raising their prices, the pace of price growth in the services sector has slowed down.

In another positive sign, more jobs were created this month. The composite employment index rose to 50.1 from 49.2, indicating job growth for the first time in eight months.

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