Eurozone factory downturn shows signs of easing - PMI

(Sharecast News) - The eurozone's manufacturing sector's enduring downturn showed signs of easing amid hopes of more spending on infrastructure and defence, according to flash survey results published on Monday. Manufacturing's purchasing managers' index from HCOB increased to 48.7 this month from 47.6 in February. The composite purchasing managers' index rose to 50.4 this month from 50.2 in February and its highest since August. A mark above 50 indicates growth.

In services, the PMI fell to 50.4 from last month's 50.6. However, an index measuring factory output showed expansion hit a 34-month high, jumping to 50.7 from 48.9.

"Just in time with the beginning of spring we may see the first green shoots in manufacturing," said Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank.

"While we should not be carried away by a single data point, it is noteworthy that manufacturers expanded their output for the first time since March 2023."

"It's also encouraging, that the index output has risen for three months straight. This is complemented by a much softer fall in new orders and employment."

"One could pour some cold water on this development arguing that it's the temporary tariff-related import boom from the US which has driven the improvement in manufacturing. However, given the will of Europe, to invest heavily in defense and infrastructure - in Germany a corresponding historical fiscal package has been approved only last week - hope for a more sustained recovery seems well founded."

Reporting by Frank Prenesti for Sharecast.com