According to the flash report from HCOB, business activity in the private sector of the eurozone continued to expand in March, reaching a 7-month high. However, a further decline in new orders was recorded in March, while employment stabilized. On the price front, both input costs and output charges rose at slower rates.
The eurozone composite PMI output index rose to 50.4 points from 50.2 points in February. An index value above 50 points indicates an expansion of activity in the sector. Economists had expected growth to 50.8 points. The services PMI fell to 50.4 points (4-month low) from 50.6 points in February, while the manufacturing PMI rose to 48.7 points (26-month high) from 47.6 points. Economists had expected the services PMI to rise to 51.0 points and the manufacturing PMI to reach 48.0 points.
HCOB said that new orders in the private sector fell again in March (the 10th month in a row), with the pace of reduction little-changed since February. Meanwhile, new export orders also fell, but at the weakest pace since May 2022. The data also showed that employment was broadly unchanged in March amid a faster rise in services employment and softer reduction in workforce numbers at manufacturers. Backlogs of work decreased solidly, and to the largest extent in four months. As for the inflationary situation, the rate of input cost inflation softened in March, ending a five-month sequence in which the pace of increase had quickened. The latest rise was the weakest since November last year. Selling prices also increased at a slower pace at the end of the first quarter, with the pace of inflation the weakest in the year to-date. Meanwhile, business confidence deteriorated again in March and was the lowest since last November amid waning optimism in both manufacturing and services.