Eurozone March final services PMI 55.0 vs 55.6 prelim | Forexlive

• Prior 52.7
• Composite PMI 53.7 vs 54.1 prelim
• Prior 52.0

Both the headline and composite readings are at 10-month highs as the euro area economy caps off Q1 with three straight months of expansion. A pick up in demand conditions certainly helped while a softening of price pressures (output price inflation slowing to a 22-month low) is also a contributive factor. S&P Global notes that:

“The eurozone economy continues to bounce back from
the lull we saw at the back-end of 2022 and the latest PMI
survey will add fresh conviction to the view that, at least for
now, the euro area is clear of a recession.

“March’s increase in economic activity mainly reflected
strong growth across the service sector. Better momentum
here is encouraging given the squeeze on household
incomes from high inflation and rising borrowing costs.
However, the picture is mixed at the country level, with a
considerable upward push to growth coming from Spain
and, to a lesser extent, Italy during March. It is difficult to
envisage expansions of these magnitudes being
sustained, meaning that a further strengthening of growth
is dependent on other parts of the eurozone. Activity levels
in Germany and France rose only modestly in March,
painting a more conservative picture of underlying
economic health in the eurozone.

“The case for further interest rate increases also remains
strong based off the survey’s price gauges. Although
inflation rates have cooled from their peaks, they continue
to run in hot territory, particularly across the service
sector.”