Eurozone factory growth hits six-year high in March as growth accelerates in Germany, Italy and France. IHS Markit’s final manufacturing Purchasing Managers’ Index for the eurozone rose to 56.2 in March, the highest since April 2011, from 55.4 in the previous month. The reading was in line with expectations.
An index measuring output, which feeds into a composite PMI due on Wednesday, rose to a near six-year high of 57.5 from 57.3. The flash estimate was 57.2. A sub-index measuring delivery times fell to 41.9 from 43.9, its lowest reading since May 2011. New orders surged despite prices charged rising faster than in any month since June 2011.
Factories across the euro zone struggled to keep up with demand last month. The survey is also signalling the highest incidence of supplier delivery delays for nearly six years. “These delays send warning signal about rising inflationary pressures, as busy suppliers are often able to hike prices,” said Chris Williamson, chief business economist at IHS Markit.
March saw eurozone manufacturing employment increase for the thirty-first consecutive month. Price pressures remained elevated at the end of the opening quarter. Manufacturers’ purchasing costs rose at a rate close to February’s 69-month high, leading to the steepest increase in factory gate selling prices since June 2011.
“Euro zone manufacturing is clearly enjoying a sweet spell as we move into spring, but it is also suffering growing pains in the form of supply delays and rising costs,” said Chris Williamson, chief business economist at IHS Markit.