Published: March 24, 2023 at 5:14 a.m. ET
By Xavier Fontdegloria
Business activity in the eurozone gathered steam in March driven by resilience in the services sector, suggesting the region is on track to avoid a contraction in the first quarter despite high inflation and rising interest rates, data from a purchasing managers survey showed Friday.
The S&P Global Flash Eurozone PMI…
By Xavier Fontdegloria
Business activity in the eurozone gathered steam in March driven by resilience in the services sector, suggesting the region is on track to avoid a contraction in the first quarter despite high inflation and rising interest rates, data from a purchasing managers survey showed Friday.
The S&P Global Flash Eurozone PMI Composite Output Index–which gauges activity in the manufacturing and services sectors–increased to 54.1 in March from 52.0 in February, a 10-month high. The indicator suggests private-sector activity in the eurozone continued to expand in March as it came in well above the 50 no-change threshold.
Economists polled by The Wall Street Journal expected the PMI to come in at 51.9.
The survey is consistent with gross domestic product growth of 0.3% in the first quarter, S&P Global Chief Business Economist Chris Williamson said.
“Growth has been buoyed since the lows of late last year as recession fears and energy market worries fade, inflation pressures ease and the unprecedented supply chain delays seen during the pandemic are replaced with record improvements to supplier delivery times,” he said.
The data doesn’t point to a big hit from the recent banking sector stress, with business sentiment remaining resilient despite the uncertainty caused by this turmoil and the potential impact of further interest rate increases, the report said.
The acceleration in activity was driven by the services sector, while manufacturers continued to struggle due to a further loss in new orders, it said.
The eurozone economy stagnated in 2022’s fourth quarter, but both household consumption and investment contracted amid high inflation and rising interest rates. Economists expect the region to contract by a marginal 0.1% in the first quarter, according to a consensus forecast provided by FactSet.
Write to Xavier Fontdegloria at [email protected]
