Eurozone Manufacturing Up Again in March.

02 April 2004

Good news and bad from the Eurozone -- the eight largest European economies (Austria, France, Germany, Greece, Ireland, Italy, The Netherlands and Spain) within the twelve-nation euro currency zone.

The good news is that the Reuters Eurozone Manufacturing Purchasing Manager Index rose in March from 52.5 to 53.3, the seventh consecutive month in which it has posted a gain.

The bad news: input cost inflation also rose sharply, the seasonally adjusted Input Prices Index leaping from 59.4 in February to 65.3 in March, the sixth month in a row that raw material price have risen.

The seasonally adjusted key indicators in March were …

Up for the seventh successive month, with the seasonally adjusted Manufacturing Output Index rising from 54.3 in February to 54.7 in March. Output rose in all countries surveyed, with the fastest growth again seen in Austria, followed by Greece and then Germany.

New Orders
The index rose from 54.6 in February to 55.1 -- the eighth month of increase. The improvement was in part driven by stronger growth of exports, attributable to sustained economic growth in the US and Asia, plus the recent weakening of the euro against the US dollar. The most marked growth was generally recorded for investment goods (such as plant and machinery) and intermediate goods (components). New orders for consumer goods showed the weakest rise.

For the thirty-fourth consecutive month employment declined.. Firms commonly cited the need to increase productivity in order to remain competitive. However, the seasonally adjusted Employment Index rose from 48.1 in February to 48.7, signalling a weaker rate of job losses as increasing numbers of companies reported the need to expand capacity to meet recent growth of order books.

Input prices
Average input prices rose markedly as reported above. Higher prices for steel products and electronics components were especially widely reported. In many cases, higher prices were attributed to supply shortages, especially for steel products.

The Reuters PMI data is collated by NTC Research from information provided by around 3,000 manufacturers across the Eurozone. It reflects hard data on recent changes in activity levels rather than business sentiment or expectations. As such, the index provides the earliest indication of actual business conditions. March survey data were collected after the Madrid bombings of 11 March.

Data sourced from: NTC Research; additional content by WARC staff