The Manufacturing Purchasing Managers’ Index (PMI) for the Eurozone was 45.7 in March, compared to 46.5 the previous month. This figure turned out to be worse than predicted (47.0), with the index still below the 50-point benchmark.
Yet again, we pay particular attention to the reading from Germany, where it seemed just two months ago that the worst of their industrial slump was over, with a PMI posted at 45.4. There were expectations of an imminent resurgence in this sector. However, that didn’t occur and the German economy, which is relatively heavily dependent on industry, continues to show weakness. In March, the industrial sector indicator was 41.6, versus the expected 43.1.
Much better data has been recorded in the services sector. The PMI for the Eurozone in this sector rose to 51.1 points. This rise comes as a pleasant surprise, with the consensus predicted to be 50.5. This marks another month where we see a leading digit of five.
The composite PMI was 49.9, compared to 49.2 the previous month – just a step away from the 50-point level. Despite the enduring weakness of the manufacturing sector, a stronger rebound in the services sector has allowed for an increase in the aggregate index. If the improvement in the services sector continues, it could help to avoid a recession in the coming quarters.
Bartosz Wałecki, Analyst Michael / Ström Dom Maklerski
