Eurozone: composite PMI returns to growth

Chart of the Week

March’s final PMI figures included a composite reading revised upwards from 49.9 to 50.3. In December, the index had sunk to just 47.6. The current level now reflects a slightly expanding eurozone economy.

The services sector largely contributed to the uptick by climbing to 51.5. In contrast, the manufacturing PMI stands much lower at 46.1, largely owing to weakness in Germany. In both sectors, the new orders component is pointing upwards.

In parallel, the European Commission’s Economic Sentiment Indicator (ESI) for March was stable compared with February.


The eurozone PMI readings are consistent with marginal, non-annualised growth of 0.2% while the European Commission’s ESI indicates a weaker growth level that remains very slightly positive.

Of the two indicators, the composite PMI has a better track record of correlating with growth. However, as it tended to overestimate economic shifts in 2023, we should beware of overinterpretation. That being said, this uptick in the PMI can only be good news for the eurozone economy.


Written on April 5, 2024. This is not an investment advice. Opinions subject to change.

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