A composite gauge slipped to 53.2 from 53.3 in
February. The index has been above 50, indicating expansion, since July.
The report follows European Central Bank
Mario Draghi’s prediction that a fledgling recovery from the sovereign
debt crisis will gradually gain strength. Risks to that scenario include
the euro’s 6.2 per cent increase against the dollar in the past year
and signs of slowing growth in China.
ongoing upturn in business activity in March rounds off the euro zone’s
best quarter since the second quarter of 2011,” Chris Williamson, chief
economist at Markit, said in a statement.
China today, another survey showed manufacturing weakened for a fifth
straight month, deepening concern the nation will miss its 7.5 per cent
growth target this year. The Purchasing Managers’ Index from HSBC Holdings Plc and Markit dropped to 48.1.
The PMI report also highlights the risks of falling prices in the euro
region, a threat that has prompted Draghi to pledge he will keep
interest rates at a record low or lower “for an extended period of
“With prices charged by manufacturers and
service providers both falling again in March, there remains an argument
for further stimulus, especially if the rate of growth of activity
cools again in April,” Markit’s Williamson said. In France,
manufacturing returned to growth for the first time in two years, with
an index of factory activity rising to 51.9 in March from 49.7.
Manufacturing in Germany slipped to a four-month low of 53.8 from 54.8
in February. The central bank is expected to keep its benchmark rate at
0.25 per cent for a fifth month in April, according to a Bloomberg
survey of 41 economists published on March 13th.