- Chris Williamson, chief economist at Markit
The Euro zone's manufacturing activity rose more than initially estimated and at the fastest pace in 10 months, while new orders from overseas buyers rose on the back of a weaker Euro. The final manufacturing PMI climbed further to 52.2 points in March, up from preliminary 51.9 points. While a weaker currency is beneficial for companies, it also raises costs for manufacturers by lifting import prices. Nevertheless, businesses continued to reduce prices they charge, adding to challenges the ECB faces on the way to raise the Euro bloc's inflation back to the official target of just below 2%.
In the Euro zone's powerhouse, Germany, final data showed that the manufacturing continued to grow in March, with the corresponding index coming in at 52.8, the highest level in 11 months. Nevertheless, March's manufacturing data from France signalled an ongoing contraction in the sector, even though the final reading was better than preliminary results. France's final manufacturing PMI came in at 48.8 in the reported month. The Euro zone's third biggest economy, Italy, reported a further improvement in manufacturing sector in March, with the corresponding PMI indicator edging up to 53.3, the highest level since April 2014. Activity in Spain's manufacturing sector continued to grow in March, indicating a solid strengthening of business conditions. The PMI for Spain reached 54.3 in March.
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