Latest data released by Markit - 24 March 2021
- Prior 45.7
- Manufacturing PMI 62.4 vs 57.6 expected
- Prior 57.9
- Composite PMI 52.5 vs 49.1 expected
- Prior 48.8
The French and German readings set out what to expect here and it is largely positive, with the services reading coming in at a 7-month high while the manufacturing reading is a record high for the overall Eurozone.
A record increase in the manufacturing output index contributed largely to the jump in factory activity, hinting that demand conditions are continuing to pick up.
Meanwhile, the services sector showed some signs of stabilisation at least but the outlook there still largely depends on how virus restrictions play out in the months ahead.
Markit notes that:
"The eurozone economy beat expectations in March, showing a much better than anticipated expansion thanks mainly to a record surge in manufacturing output.
"The service sector remains the economy's weak spot, but even here the rate of decline moderated in March as companies benefited from the manufacturing sector's upturn, customers adapted to life during a pandemic and prospects remained relatively upbeat.
"The outlook has deteriorated, however, amid rising COVID-19 infection rates and new lockdown measures. This two-speed nature of the economy will therefore likely persist for some time to come, as manufacturers benefit from a recovery in global demand but consumer-facing service companies remain constrained by social distancing restrictions.
"The surge in demand for manufactured goods is meanwhile stretching supply chains to an unprecedented extent, in turn pushing costs up at the fastest rate for a decade. These cost pressures will likely feed through to higher consumer price inflation in coming months."