The eurozone’s private sector economy grew slightly in March, marking the third month in a row of increased business activity and ending the first quarter of 2025 on a positive note. While this was the strongest growth since August 2024, it was still modest and below the survey’s long-term average.
Despite a drop in new orders, businesses managed to increase output, and employment rose for the first time since last July. Price pressures eased, with input costs and output prices rising at their slowest rates this year.
The HCOB Eurozone Composite PMI® Output Index, which combines manufacturing and services data, rose to 50.9 in March from 50.2 in February. This indicates slight growth (any reading above 50.0 shows expansion) and the fastest pace in seven months, though still below the long-term average of 52.4.
Both manufacturing and services contributed to the growth. Manufacturing output increased for the first time in two years, and services activity grew faster than in February, though both saw only mild improvements.
Most eurozone countries reported higher business activity in March, except for France, which saw its seventh straight month of decline, though at a slower pace. Ireland led the growth, reaching a four-month high, just ahead of Spain. Germany and Italy also saw modest growth, with Germany achieving its strongest activity in ten months.
Despite the positive from the data above markets have increased their rate cut bets following a better than expected inflation print as well. A sign that market participants are not completely sold on the Euro rally over the longer term just yet.
