S&P Global: The economic difficulties in the euro zone expanded in March

Manufacturing activity in the euro area contracted more in March than in February, as demand continued to fall, according to the results of a survey published yesterday, Reuters reports.

The Composite Purchasing Managers (PMI) indicator in the euro area, calculated by S&P Global and considered a good indicator of the health of the economy, fell in March to 46.1 points, from 46.5 points the previous month, below the threshold of 50 of points that separate an increase from a contraction of the economy. Preliminary data indicated a level of 45.7 points in March.

The index that measures production, included in the PMI, rose in March to 47.1 points, from 46.6 points the previous month, while preliminary data indicated a level of 46.8 points, notes Agerpres.

"The data are quite discouraging, in the last eight months the industry has grown gradually, but it is still at a low level. Progress is still not materializing, against the backdrop of below-expected performances in the main economies of the euro zone: Germany and France," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.

New orders fell for a 23rd month, even as factories cut prices at their fastest pace since November. Any sign of easing inflationary pressures will be welcomed by the European Central Bank, which is trying to bring inflation back to the 2% target, writes Reuters.

In addition, eurozone factories cut staff again, although executives expect output to improve in the future. The indicator on future production rose in March to 57.4 points, from 57.1 points the previous month, reaching the highest level since April 2023.

The euro zone avoided recession at the end of last year, and economists expect an advance of only 0.1% in the first quarter, and for the year as a whole a growth of 0.5%.