Eurozone business activity expands modestly in March ’25

The eurozone’s private sector continued its modest recovery in March, with the HCOB Eurozone Composite PMI Output Index rising to 50.9 from February’s 50.2, marking a seven-month high.

The HCOB Eurozone Services PMI Business Activity Index also inched up to 51.0 from 50.6, reaching a two-month peak, according to data released by S&P Global and Hamburg Commercial Bank (HCOB).

The latest figures indicate a third consecutive month of expansion, though growth remains weaker than the long-term survey trend of 52.4.

Business activity increased across both manufacturing and services, with goods production rising for the first time in two years. However, demand remained sluggish, and employment declined for the first time since last July.

Among the eurozone economies, Ireland led with a Composite PMI Output Index of 54.6, a four-month high, followed by Spain at 54.0. Germany saw a notable rise to 51.3, its highest level in ten months, while Italy’s business activity softened slightly to 50.5.

Despite the modest upturn, concerns persist. New business inflows remained weak, and export sales fell at a faster rate than in February.

Inflationary pressures in the services sector eased, but operating costs continued to rise. Price increases for goods and services were the mildest in the year-to-date, with manufacturers raising charges for the first time in seven months.

Looking ahead, optimism among eurozone businesses dipped to a three-month low, reflecting uncertainty over demand and monetary policy. While growth has stabilised, risks remain, particularly from external factors such as potential disruptions from US tariffs.

Attribution: Amwal Al Ghad English
Subediting: M. S. Salama