LONDON (ICIS)--The eurozone’s Purchasing Managers' Index expanded in March for the ninth consecutive month at 53.2, although the total reading was slightly lower than February’s, according to the flash estimate by financial services firm Markits Economics released on Monday.
A PMI reading above 50.0 means expansion of economic activity. February’s reading at 53.3 was the highest in 32 months, although the slower figures for March will not stop a potential positive reading in April as new orders accelerated in March to the fastest rate since May 2011, said Markit.
“The euro area economy continued to enjoy its strongest spell of growth since the first half of 2011 in March… In a sign that activity growth could pick up again in April, new order growth accelerated marginally in March to the fastest since May 2011. Also encouraging was the biggest increase in backlogs of work since June 2011,” said Markit.
The market analytics firm also noted employment in March in the eurozone rose, although slowly, for a second month, the first positive sign in terms of job creation since the end of 2011.
“The stabilisation of the job market contrasts markedly with the steep rate of job losses this time last year, highlighting the extent to which business confidence has been revived,” it added.
Both manufacturing output and new orders increased in March and factory employment rose for the third month. Markit also observed a further price moderation as companies seek to win business share.
Markit also released on Monday flash estimates for France and Germany, with both countries registering expansion. Germany’s PMI reached 55.0 in March. The figure is lower than February’s 56.4, but “the pace of expansion remained marked and above the long-run series average,” said Markit.
France, whose PMI has struggled to go above 50.0 since October 2013, surpassed the barrier in March to reach 51.6, up from 47.9 in February.
“Germany looks set to have grown by 0.7% in the first three months of the year, spearheading the region’s upturn despite its PMI slipping lower in March. However, perhaps the best news this month is the sign of the region’s upturn spreading to France,” said Chris Williamson, chief economist at Markit.
“While the [French ] PMI is consistent with a mere stabilisation of the French private sector economy in the first quarter, the improvement in the PMI to a two-and-a-half year high in March adds to hope that a fully-fledged recovery will be evident in France by the second quarter,” he added.