CdM : The eurozone economy seems to be showing signs of coming back to life. In March, the services sector has been driving the revival and economic growth has accelerated to a ten-month high, according to the PMI index. Inflationary pressures have moderated, while employment growth accelerates and business confidence remains resilient.
S&P Global’s seasonally adjusted flash composite PMI index of total euro area activity rose for the fifth consecutive month in March, from 52 in February to 54.1. This latest reading signalled that the rate of expansion has accelerated so far this year.
Once again, growth was driven by the services sector, whose business activity increased for the third consecutive month and whose index rose from 52.7 in February to 55.6 in March, its strongest expansion since May last year. A key development was a further pick-up in growth in the financial services segment, where there was a notable turnaround in real estate activity compared with the situation at the end of last year, despite recent concerns regarding the stability of the banking sector and rising interest rates.
Consumer services activity also continued to recover from the slowdown seen towards the end of last year, especially in travel and tourism services. Growth has also been recorded in industrial services, information technology and health care.
On the other hand, manufacturing output remained broadly unchanged for the second consecutive month in March, as the industrial production index fell from 50.1 to 49.9. Still, this lacklustre picture represents an improvement over the drastic declines seen throughout the second half of 2022. The automotive sector in particular reported better results, partly linked to improvements in supply chains.