Private sector economic growth reached its highest level in ten months, thanks to the dynamism of the service sector in March.
By JLB with AFP
© NANGKA PRESS / Hans Lucas / Hans Lucas via AFP
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C’is good news for the European economy. Economic growth in the private sector in the euro zone 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 on Friday by S&P Global. The index, calculated on the basis of business surveys, reached 54.1, after 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 about 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”, as 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 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 again 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. The PMI index reached 54 in France, against 52.6 in Germany, in March.
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Across the Eurozone as a whole, “employment growth accelerated in March, while the 12-month outlook for activity remained favourable, despite business concerns about the difficulties in the banking sector and to higher borrowing costs,” S&P Global commented.