LONDON (Reuters) – Growth in private sector activity in the euro zone unexpectedly accelerated in March, driven by services and despite a sharper contraction in manufacturing, preliminary survey results showed on Friday. by S&P Global.

The composite index, which combines manufacturing activity and that of services, rose to 54.1 after 52.0 in February while economists polled by Reuters gave it down slightly to 51.9.

“The eurozone economy regained strength at the start of spring 2023 (…) Survey data shows a level in line with a 0.3% increase in GDP over the first quarter, the progress even reaching, in March alone, a pace of 0.5%,” said Chris Williamson, chief economist at S&P Global.

The PMI for the dominant services industry jumped from 52.7 to 55.6, well beating the Reuters consensus of 52.5.

To cope with the increase in activity, companies have taken on additional staff at the fastest rate since May. The employment index fell from 51.9 to 54.3.

But the situation is different in industry, where the PMI index fell to 47.1 from 48.5 in February, while the consensus was for it to improve to 49.0.

An index measuring production fell back into the contraction zone at 49.9 from 50.1 last month.

“Growth in the euro zone is very unbalanced. The manufacturing sector is indeed almost at a standstill, struggling to maintain its production levels in the face of the current drop in demand,” added Chris Williamson.

(Jonathan Cable; Laetitia Volga, editing by Blandine Hénault)

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