|Composite - Level||52.2||52.6||51.4|
|Services - Level||52.3||52.7||51.6|
Private sector activity was somewhat more buoyant than previously thought at the start of the year. With the flash service sector PMI revised 0.4 points higher to 52.7, the final composite output index printed at 52.6, an upward revision of 0.4 points versus its previous estimate and 1.2 points firmer than in December.
The 5-month high on the services PMI was largely attributable to a pick-up in new orders growth, supported by a stabilisation in backlogs following a 7-month period of decline. Job creation was also positive for a third straight month although the rate of increase was again only modest despite being the fastest since the middle of 2014. Input cost inflation dropped to a near 5-year low despite some firming in wages and service provider charges declined at one of the fastest rates seen in the last five years.
Regionally in terms of composite output indices, the best performer was Ireland (60.4) ahead of Spain (56.9) and a stronger revised Germany (53.5). Italy (51.2) was also above the 50 growth threshold but France (49.3) continued to show signs of stagnation.
Today's results are consistent with a quarterly rise in Eurozone real GDP in the current period of around 0.3 percent. Prospects for the second quarter remain mixed. The start of QE by the ECB should provide business and consumer confidence with at least a small near-term lift but geopolitical tensions in Russia and Greece remain a threat and aggregate unemployment is still uncomfortably high. However, the biggest medium-term risk could yet come from sustained oil price weakness should this prompt a further significant downgrading to inflationary expectations that, in turn, leads to a deferral of would-be domestic spending.
The Eurozone Composite PMI is produced by Markit and is based on original survey data collected from a representative panel of around 5,000 manufacturing and services firms. National manufacturing data are included for Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece. National services data are included for Germany, France, Italy, Spain and the Republic of Ireland.
The Eurozone Services PMI (Purchasing Managers' Index) is produced by Markit and is based on original survey data collected from a representative panel of around 2,000 private service sector firms. National data are included for Germany, France, Italy, Spain and the Republic of Ireland. These countries together account for an estimated 80% of Eurozone private sector services output.
Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.