Good news for the euro zone. Economic growth in the private sector accelerated in March to its highest level in ten months, thanks to the dynamism of the services sector, according to the Flash PMI index published Friday by S&P Global.
The index, calculated on the basis of business surveys, reached 54.1, following 52 in February, rising for the fifth consecutive month. A figure above 50 signals growth in activity, while a figure below indicates decline.
“The latest survey data shows a level consistent with a 0.3% increase in GDP over the whole of the first quarter” compared to the previous one, underlined Chris Williamson, economist for S & P Global, quoted in a communicated. “Growth has rebounded from the lows of the end of 2022, as concerns regarding the situation in energy markets and the risk of recession have partly dissipated”, he noted, also referring to easing inflationary pressures and improving supply chains.
“Very unbalanced” growth
However, growth in the euro zone is “very unbalanced”, because it relies “almost exclusively on the performance of the service sector” while “the manufacturing sector is almost at a standstill, struggling to maintain its production levels in the face of to the current decline in demand”, worries Chris Williamson.
Industrial activity has also deteriorated, “the volume of new orders received by manufacturers in the euro zone having once more fallen”. Production levels were only supported by “backorder processing,” according to S&P Global. By country, overall activity increased for the second consecutive month in France and Germany, the increase having been less sustained in Germany.
