After four consecutive months of decline, economic activity in the Eurozone returned to growth during the month of March, driven by industrial production, whose growth was the strongest in almost 24 years.
The Eurozone composite PMI – which measures the evolution of economic activity through the performance of industry and services – grew from 48.8 points in February to 53.2 points in March, the highest level since July last year and the second highest in the last two and a half years.
The Eurozone thus surpassed the level of 50 points that divide the contraction of expansion (readings below 50 points indicate a fall in activity) in a month marked by the easing of some restrictions in most countries of the single currency.
Supporting this growth was essentially the evolution of the industry, which registered the strongest growth since the registrations started, almost 24 years ago, in a month marked by a strong rise in new orders.
The services sector, on the contrary, contracted for the seventh consecutive month, strongly penalized by the closure of many of the activities that require face-to-face contact. Even so, the sector-specific PMI grew from 45.7 points in February to 49.6 points last month, already close to the mark that indicates growth.
The data indicate that the economy “has withstood much better constraints than many expected, thanks to industry growth and signs that distance and mobility restrictions are having far less impact on service sector companies than last year. “says Chris Williamson, chief economist at IHS Markit. “This resilience suggests not only that companies and their customers are more positive about the future, but that they are also increasingly adapted to life with the virus.”
In geographic terms, the picture of improvement extended to the entire Eurozone, with all countries registering an increase in the indexes in March. However, growth was once again led by Germany, where the strong acceleration in the industry helped drive the better overall performance of the country’s activity in more than three years. Ireland also experienced solid expansion, followed by modest growth in Italy and a slight increase in activity in Spain. France was the only country that did not register growth in economic activity, although production remained stable after six successive monthly declines.