Eurozone growth turns higher for first time in three months

Markit’s flash Eurozone PMI data released on Tuesday, showed that Eurozone economy regained some momentum at the end of the first quarter, expanding at the fastest rate since December. Flash Eurozone PMI rose from 53.0 in February to 53.7 in March.

However, despite the rise in March, the average PMI reading for the first quarter of 53.4 was the lowest quarterly trend for a year, signalling a slight slowing in the pace of economic growth. Flash Eurozone Services PMI Activity Index rose to a 3-month high at 54.0 (53.3 in February). Expectations about the year ahead also rose in the service sector, reaching the second-highest seen in the past 11 months.

Manufacturing once again lagged behind services, but also saw growth of output and new orders accelerate slightly, improving on the 12- and ten-month respective lows seen in February. Flash Eurozone Manufacturing PMI was at 51.4 (51.2 in February), while manufacturing PMI Output Index was at 52.7 (52.3 in February).

“The eurozone saw renewed signs of life at the start of spring. Plenty of worrying signs persist, however, to take the shine off the rise in the headline PMI. The upturn in March nevertheless hopefully provides a springboard for recent additional stimulus from the ECB to help boost growth further in the second quarter and into the summer,” said Chris Williamson, Chief Economist at Markit.