The euro area private economy maintained its growth momentum in March, with activity expanding for the ninth consecutive month, preliminary survey data from Markit Economics showed Monday.
The flash composite output index came in at 53.2 in March. The above 50 score signals expansion. However, the score was slightly lower than February's 32-month high of 53.3 and the expected level of 53.1.
The euro area economy continued to enjoy its strongest spell of growth since the first half of 2011 in March, Markit said in the report. Suggesting that activity growth could pick up again in April, new order growth accelerated marginally to the fastest since May 2011.
In addition, backlogs of work increased the most since June 2011. Employment rose for a second month, providing the first signs of job creation since the end of 2011.
Prices charged by manufacturing and service providers fell on average to the greatest extent since last July.
The flash Eurozone services PMI fell to 52.4 from 52.6 in February, when it was expected to drop to 52.5. Similarly, in manufacturing, the index slid to 53.0, in line with expectations, from 53.2 in February.
The survey is signaling a 0.5 percent increase in GDP in the first quarter, building on the 0.3 percent increase seen in the final quarter of last year, Chris Williamson, chief economist at Markit said.
But, the recovery remains too weak to significantly erode the region's large amount of spare capacity, James Howat, a European economist at Capital Economics said. By maintaining downward pressure on prices, this may force the ECB to loosen monetary policy again soon, added Howat.
IHS Global Insight's Chief European Economist Howard Archer said, it is going to be far from plain sailing for Eurozone over the coming months as a number of significant growth constraints remain.
Survey data from Germany revealed that the private sector growth slowed from a 33-month high, but the pace of expansion remained marked in March.
The flash composite output index dropped to 55.0 from 56.4. The easing in the rate of activity growth was broad-based, with both manufacturers and service providers indicating weaker expansions than seen in February.
The flash services activity index slipped more-than-expected to 54.0 from 55.9 in February. The flash manufacturing PMI came in at 53.8, down from 54.8 in February.
Meanwhile, the French PMI survey showed the private sector returning to growth for the first time since last October. The flash composite output index rose to 51.6 from 47.9 in February. Moreover, the latest reading signals the fastest growth in 31 months.
Expansion was broad-based across the French service and manufacturing sectors. The services activity index climbed to 51.4, a 26-month high, from 47.2 in February.
Similarly, the manufacturing PMI improved more than expected to 51.9, a 33-month high, from 49.7 in the prior month.
Excluding France and Germany, the rest of the Eurozone saw output and new orders rise for the eighth month running.
