The Eurozone's private sector remained in marginal growth territory in March 2025, with the flash Eurozone composite PMI at 50.4. While Germany posted its strongest expansion in ten months, France continued a 7-month long contraction.

Services continued to grow (PMI 50.4), but momentum slowed to a 4-month low. Manufacturing remained in contraction (PMI 48.7) despite hitting a 26-month high. New orders fell for the tenth consecutive month, signalling weak demand, with services joining manufacturing in decline.

Employment recovered in March, bringing an end to a period of job loss that started in August 2024. Except for France and Germany, the rest of Europe sae expansion in workforce. This suggests that overall employment is stable. With employment stable backlogs of work shrank. Inflationary pressures eased, with input costs rising the slowest since November 2024. Service sector prices drive the slow down inflation, but manufacturing sector also saw muted input cost increase.

Eurozone businesses remain cautious, with confidence slipping for the second month in a row. While Germany's resilience offers some optimism, France's decline and persistent demand weakness cast doubts over sustained recovery. The latest update takes the RPI to minus 15 and the RPI-P to minus 19, meaning that economic activities are falling short of market expectations.

The manufacturing flash is expected at 48.0, services at 51.0 and composite at 50.5.

The flash Composite Purchasing Managers' Index (PMI) provides an early estimate of current private sector business activity by combining information obtained from surveys of the manufacturing and service sectors of the economy. The flash data are released around ten days ahead of the final report and are typically based upon around 75-85 percent of the full survey sample. Results covering a range of variables including manufacturing output, employment, new orders, backlogs and prices are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) activity versus the previous month and the closer to 100 (zero) the faster is activity growing (contracting). The report also contains flash estimates of the manufacturing and services PMIs. The survey, produced by S&P Global uses a representative sample of around 5,000 manufacturing and services companies, the former including Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece and the latter Germany, France, Italy, Spain and the Republic of Ireland.

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.