Eurozone Private Sector Growth At 7-Month High

(RTTNews) - The euro area private sector growth accelerated to a seven-month high in March, adding to hopes of recovery in the currency bloc as the fiscal support planned by Germany is more likely to offset the threats caused by the U.S. tariffs, final results of the monthly purchasing managers' survey by S&P Global showed on Thursday. The HCOB composite output index ticked up to 50.9 in March from 50.2 in February. The flash score was 50.4.

The index remained in the expansion territory for the third successive month and signaled the fastest growth since August last year.

Growth rates accelerated in both manufacturing and services sectors. Manufacturing output expanded for the first time in two years, while services activity levels rose at a faster pace than in February.

The services Purchasing Managers' Index improved to 51.0 in March from 50.6 in February. The reading was above the flash reading of 50.4.

"At the end of last year, it looked like the Eurozone was heading into a recession, but things have somewhat stabilized at the start of this year," Hamburg Commercial Bank Chief Economist Cyrus de la Rubia said.

However, U.S. tariffs could quickly throw the Eurozone's economy off the course again, the economist added. "That's why the fiscal package planned by the Eurozone's largest economy, which is mainly aimed at supporting the defense and construction industries but could also indirectly benefit the service sector, is a welcome counterweight," de la Rubia said.

More moderate expansions were seen in Germany and Italy. Meanwhile, France was an outlier, posting a seventh consecutive monthly contraction. Although Spain expanded strongly, the pace of growth softened from February.

Driven by the upturn in manufacturing production, Germany's private sector growth hit a ten-month high. The composite output index rose to 51.3 in March from 50.4 in February. The reading was above the flash estimate of 50.9.

The services PMI fell to 50.9 in March from February's 51.1 but remained above the preliminary score of 50.2. France's private sector continued to shrink but the severity of the downturn faded in March. The composite output index climbed more than initially estimated to 48.0 in March from 45.1 in February. The flash reading was 47.0.

Similarly, the services PMI rose to 47.9 in March from 45.3 in February. The initial score was 46.6.

The Italian private sector economy continued to be supported by services output growth as manufacturing production continued to decline. The composite output index eased slightly to 50.5 in March from 51.9 in February.

At 52.0, the services PMI indicated a weaker rate of expansion in output compared to February. The score was expected to fall to 52.6 from 53.0 in February.

Spain's private sector growth sustained in March, but to a lesser degree as new orders rose at a noticeably slower pace. The composite output index logged 54.0 in March, up from 55.1 in February.

The HCOB services PMI registered 54.7 in March, down from February's 56.2. This was also weaker than economists' forecast of 55.6.