Eurozone March preliminary services PMI 48.8 vs 46.0 expected

Latest data released by Markit – 24 March 2021

  • Prior 45.7
  • Manufacturing PMI 62.4 vs 57.6 expected
  • Prior 57.9
  • Composite PMI 52.5 vs 49.1 expected
  • Prior 48.8

The French and German readings set out what to expect here and it is largely positive, with the services reading coming in at a 7-month high while the manufacturing reading is a record high for the overall Eurozone.

A record increase in the manufacturing output index contributed largely to the jump in factory activity, hinting that demand conditions are continuing to pick up.

Meanwhile, the services sector showed some signs of stabilisation at least but the outlook there still largely depends on how virus restrictions play out in the months ahead.

Markit notes that:

The eurozone economy beat expectations in
March, showing a much better than anticipated
expansion thanks mainly to a record surge in
manufacturing output.

“The service sector remains the economy’s weak
spot, but even here the rate of decline moderated in
March as companies benefited from the
manufacturing sector’s upturn, customers adapted
to life during a pandemic and prospects remained
relatively upbeat.

The outlook has deteriorated, however, amid rising
COVID-19 infection rates and new lockdown
measures.
This two-speed nature of the economy
will therefore likely persist for some time to come,
as manufacturers benefit from a recovery in global
demand but consumer-facing service companies
remain constrained by social distancing restrictions.

“The surge in demand for manufactured goods is
meanwhile stretching supply chains to an
unprecedented extent, in turn pushing costs up at
the fastest rate for a decade. These cost pressures
will likely feed through to higher consumer price
inflation in coming months.”

 

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