Rate of expansion in eurozone services sector business activity moderates further in March

The final Eurozone Services Business Activity Index posted 53.1 in March, down further from December’s 54.2. The headline index was also below its earlier flash estimate of 54.0. France and Italy together explained 0.7 points of the drop from flash to final. Worst performance was again seen in France, where the March PMI indicated stagnation.

Germany, Spain and Ireland remained the bright spots, all of which reported solid expansions of output and new business. Ireland topped the growth rankings and, along with Spain, saw its rate of increase in service sector activity strengthen. Employment rose in all three nations.

Input prices at eurozone service providers rose for the seventy-sixth successive month in March. Despite ticking higher, the rate of inflation remained below its long-run trend. Service sector charges decreased for the sixth straight month in March, amid reports of stronger price competition between companies.

“Hopes are pinned on the economy being rejuvenated by the ECB’s more assertive policy initiatives, and the upturn in service sector optimism seen during the month suggests that firms are taking a more positive view of the outlook." said Chris Williamson, Chief Economist at Markit.