Eurozone economic growth gathers pace in March

Economic growth in the eurozone continued to gather pace in March, according to a survey released on Friday, underpinned by the service sector as manufacturing stagnated.

S&P Global’s flash eurozone composite purchasing managers’ index - which measures activity in both the manufacturing and services sectors - rose to 54.1 from 52.0 in February. This marked a 10-month high and was well above consensus expectations of 51.9.

A reading above 50.0 indicates expansion, while a reading below signals contraction.

The services PMI improved to 55.6 in March from 52.7 a month earlier, while the manufacturing output PMI fell to 49.9 from 50.1.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said: "The eurozone economy is showing fresh signs of life as we enter spring, with business activity growing at its fastest rate for ten months in March. The survey is consistent with GDP growth of 0.3% in the first quarter, accelerating to an equivalent rate of 0.5% in March alone.

"Growth has been buoyed since the lows of late last year as recession fears and energy market worries fade, inflation pressures ease and the unprecedented supply chain delays seen during the pandemic are replaced with record improvements to supplier delivery times. Business confidence is also so far showing encouraging resilience in the face of further interest rate hikes and the uncertainty caused by recent banking sector stress."