According to the final report from HCOB, business activity in the manufacturing sector of the eurozone continued to contract in March, but reached its highest level since January 2023. Factory production grew for the first time in two years, with the expansion being the fastest in almost three years.
The eurozone manufacturing PMI rose to 48.6 points in марте from 47.6 points in феврале. An index value below 50 points indicates a reduction in activity in the sector. Economists had expected an increase to 48.7 points.
HCOB said that factory output in the eurozone expanded for the first time in two years, showing its strongest growth since May 2022. This increase came despite a continued drop in new business, as incoming orders declined again in March. However, the rate of decline was the weakest in nearly three years. Export demand remained sluggish, with foreign orders falling further, though at the slowest pace since April 2022. The manufacturing sector also saw a reduction in backlogged work as output rose while new orders remained low. Yet, the decline in outstanding business was the least pronounced since mid-2022. Workforce cuts continued across eurozone factories due to excess capacity concerns, but the pace of job losses slowed compared to February, reaching its softest level in seven months. Input costs for manufacturers kept rising in March, extending the inflationary trend seen this year. The rate of increase reached a seven-month high, though it remained moderate by historical standards. Higher costs led to a slight rise in prices for finished goods, marking the first increase since August 2023. Looking ahead, eurozone manufacturers anticipate higher production volumes, with optimism slightly above the long-term average. However, confidence weakened to a three-month low, reflecting lingering concerns about demand and economic conditions.