Eurozone manufacturing index reaches 24-year record

The IHS Markit Eurozone Manufacturing PMI index in March reached a new 24-year record, confirming the positive trend in the region’s manufacturing sector.

“The eurozone’s manufacturing economy performed extremely strongly during March, with operating conditions improving to the greatest degree in nearly 24 years of data collection,” Markit says.

The March index reached 62.5, up from February’s 57.9. Levels above 50.0 indicate expansion in the sector; the EU manufacturing index has now remained above 50.0 for nine consecutive months, Kallanish notes.

The German index reached the highest level of 66.6, followed by the Netherlands (64.7) and Austria (63.4). Spain (56.9) and Greece (51.8) registered the lowest levels, but these nonetheless continue to indicate that the sector is expanding.

“Driving the upturn has been a marked improvement in business confidence in recent months, with expectations of growth in the year ahead running at record highs in February and March,” says Chris Williamson, chief business economist and Markit. “This has not only boosted spending but has also led to rising investment and restocking, as firms prepare for even stronger demand following the vaccine roll-out.”

“The picture is blighted, however, by record supply chain disruptions, which will likely be exacerbated further by delays arising from the Suez Canal blockage. Prices are already rising at the fastest rate for a decade as demand outstrips supply, resulting in a sellers’ market for many goods,” Williamson adds.

March data also confirms that manufacturing production in the eurozone is likely to have surpassed the pre-Covid-19 peak. “Hiring has already accelerated markedly as producers seek to build additional capacity to meet higher demand,” Markit concludes.

Emanuele Norsa Italy