Modest growth but no upsurge for euro firms

THE EUROZONE’S firms recorded another modest expansion in March but missed out on a more rapid return to growth, according to a major survey of companies.

The Markit purchasing managers’ index (PMI) pointed to further reasonable growth last month, with a score of 53.1. Any score over the neutral level of 50 suggests that businesses are seeing a positive climate and getting larger.

But the score fell slightly from February’s level, and has been between 52.7 and 53.3 for the past six months, indicating that the figure may be plateauing.

The UK’s services PMI, released separately by Markit and the Chartered Institute of Purchasing and Supply, dropped a little in March.

However, at 57.6, British services companies are pointing to continued robust growth, at a stronger pace than any Eurozone country.

The PMI has spiked as high as 62 in recent months, but now appears to be moderating to more normal levels for long-term growth.

French and Irish PMI scores were particularly strong last month, in comparison to their recent performances. The French figure reached 51.8, the highest in over two and a half years, while Ireland’s PMI hit an impressive 59, the best reading for the country in just over seven years.

German, Italian and Spanish PMI figures all marginally fell from previous months. Overall, the employment part of the indicator is steady in the Eurozone.

Figures for retail sales in the Eurozone were also released yesterday, indicating a moderate improvement in demand during February. The sales index rose 0.4 per cent from January alone, and 0.8 per cent in comparison to February last year.

Mads Koefoed of Saxo Bank commented on the sales figures: “The first quarter euro area GDP report will not be released for another month, but so far our GDP tracker points to quarterly growth of 0.3 per cent, which would represent an acceleration on the fourth quarter’s 0.2 per cent.”