-Chris Williamson, chief economist at Markit
The Euro zone' services sector continued to expand, adding to signs the economic recovery is taking hold in the region. The services PMI came in at 54.2, up from 53.7 in the preceding month and hitting nearly four-year high. In Germany, the Euro zone's growth engine, activity in the services sector rose to a six-month high in March, with the corresponding gauge coming in at 55.4 up from February's 54.7. German services providers' sentiment towards the 12-month outlook for business activity rose to a four-year high in March. Moreover, in France, the Euro zone's second biggest economy, activity in the services sector increased for the second consecutive month. Even though the final services PMI came in at 52.4 in the reported month, down from 53.4 in February, the index remained in the expansion territory. Meanwhile, Markit's composite PMI, which measures business activity in both the manufacturing and services sectors, climbed to 54.0 in March, compared with 53.3 reported in the previous month, reaching the highest level since May 2011.
A separate report showed industrial producer prices in the Euro bloc, a bellwether for the closely watched consumer prices, dropped again in February, with the reading booking the 19th month running in contraction on an annual basis, Eurostat reported. The Euro zone's PPI slid 2.8% on year in February, after the 3.1% drop.
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