Businesses across the eurozone performed much worse than expected in March, data from IHS Markit showed today. IHS Markit’s Flash Composite Purchasing Managers’ Index dropped to 51.3 this month from a final February reading of 51.9. The flash manufacturing PMI sank to 47.6 from February’s 49.3, its lowest reading since April 2013 and well below the 50 mark that separates growth from contraction. A Reuters poll had predicted a modest rise to 49.5 and even the most pessimistic economist surveyed had predicted a reading of 48.4.
However, the mood was slightly lifted by modest growth in the services industry, which dipped to 52.7 from 52.8.
The mood of the eurozone was dragged down by weak data from both Germany and France – the first and third largest economies in the bloc, respectively.
Germany fell to its lowest level since 2012, with the manufacturing sector tumbling to a 79-month low of 44.7 in March.
A reading below the 50.0 mark indicates contraction.
Exports from Europe’s largest powerhouse have been dented from disputes between the United States and China, as well as ongoing Brexit uncertainty.
Meanwhile in France, business activity slowed unexpectedly as a recent rebound ran out of steam in the face of deteriorating demand.
The new orders index dropped to 44.5 from 46.3, a level not seen since the end of 2012.
Growth in the services industry slowed in line with a Reuters poll.
Its PMI dipped to 52.7 from 52.8.
Chris Williamson, chief business economist at IHS Markit, said: “The eurozone economy ended the first quarter on a soft note, with the flash PMI running at one of the lowest levels seen since 2014.
“The survey indicates that GDP likely rose by a modest 0.2 percent in the opening quarter, with a decline in manufacturing output in the region of 0.5 percent being offset by an expansion of service sector output of approximately 0.3 percent.”
Bert Colijn at ING added: “The March decline in the euro zone’s PMI indicates the bloc’s economic problems are far from over.
“Today’s PMI indicates that GDP growth is unlikely to have bounced back in Q1.”
Bitcoin Market Price Chart in RealTime