Quasi-stabilization of the euro zone economy in March (HCOB flash PMI indices)

(Boursier.com) — The latest flash PMI data signal a virtual stabilization of the overall activity of private companies in the euro zone in March, with it only recording a marginal decline during the month. This trend is explained by a strengthening of the very slight growth recorded in February in the services sector, as well as a slowdown in the decline in production levels in the manufacturing industry. The continued declines in overall activity in France and Germany, however, contrast with the acceleration in growth recorded in the rest of the euro zone, with these divergent trends highlighting economic imbalances within the region.

The seasonally adjusted Flash PMI composite HCOB index of overall activity in the euro zone, based on around 85% of the usual number of survey responses, thus recovered from 49.2 in February to 49.9, against 49.7 consensus. The HCOB Flash PMI index for services activity stood at 51.1 (50.2 in February and 50.5 consensus), a 9-month high, while the HCOB Flash PMI index of the manufacturing industry fell to 45.7 (46.5 in February), a 3-month low.

Norman Liebke, Economist at Hamburg Commercial Bank, comments on the latest survey figures: “March’s flash PMI data dash any hope of recovery in the Eurozone’s manufacturing sector in the first quarter. The weakness of industry, as shown by the latest results of the survey, mainly reflects that of Germany, heavyweight of European industry. Production levels continued to decline, and at a rate close to those recorded during the first two months of the year, while the volume of new orders continued its downward trajectory. Data relating to stocks and activity prospects nevertheless allow us to hope for an imminent improvement in the situation in the sector. Indeed, manufacturers are say they are optimistic about growth in their production over the next twelve months, and the finished goods inventory index recovered for a second consecutive month, thus approaching the threshold of no change. When the index reaches this threshold, destocking operations in euro zone industries will cease to weigh on production volumes.