THE EUROZONE’S service sector is expanding at its fastest rate since July last year, new survey data show.
The figures will boost hopes that the currency union can sustain some growth after its economic recovery ran out of steam last year.
A survey of private sector firms – Markit’s purchasing managers’ index (PMI) – climbed to a score 54.2 for March, up from February’s 53.7, according to data released yesterday.
Any score above 50 signifies growth with higher numbers implying faster growth. The composite (PMI) – which averages the survey with other surveys from manufacturing and construction – rose to 54 from 53.3.
“We believe that the Eurozone is headed for significantly improved GDP growth of 1.6 per cent in 2015,” said Howard Archer, an economist at market analysts IHS. Archer also believes the economy grew by 0.4 per cent in the first three months of this year after growing by 0.3 per cent in the final three months of 2014. However, Archer warns that countries must push on with reforms to their economies.
“This should not mask the fact that significant underlying structural problems remain in many countries, and governments should ideally take advantage of improved cyclical growth to press ahead with much needed reforms to enhance longer-term growth prospects.”
Ireland led the Eurozone with a PMI of 59.8, despite the score being a nine-month low. Spain also score highly at 56.9. Italy and France remained weak, with scores in the low 50s – 52.4 and 51.5 respectively.
The currency bloc’s growth hopes have also been boosted by an uptick in sentiment. Investor sentiment picked up for a sixth straight month in April, according to figures released by research group Sentix yesterday. The headline Sentix index increased to a score of 20 in April from 18.6 in March. Sentiment is at now its highest level since August.