The final data provided by HCOB showed that activity in the eurozone manufacturing sector declined slightly in March, reaching a 3-month low. Meanwhile, business confidence rose to its highest level in nearly a year, but growth expectations remained relatively weak, which weighed further on factory employment.
Manufacturing PMI fell to 46.1 points from 46.5 points in February. The index remains below 50 points, which indicates a reduction in activity in the sector, since July 2022. Economists had expected the index to fall to 45.7 points. The decline in the index was driven by movements in the two smallest components – suppliers’ delivery times and stocks of purchases.
HCOB said that the manufacturing output decreased in March, extending the current period of decline to exactly one year. However, the rate of contraction was the weakest since April 2023. A slower downturn was also seen for new orders, with the rate of reduction easing for a fifth month in a row. Meanwhile, export sales fell to the weakest extent in close to two years. Eurozone goods producers continued to reduce purchases of raw materials in March, although this decline was the weakest since March 2023. Supplier delivery times have decreased the most since September last year, despite ongoing problems in the Red Sea. Meanwhile, eurozone goods producers made further inroads into their backlogs of work. Although the rate at which incomplete orders fell was its slowest since February 2023, it remained steep overall. The data also indicated a further decline in the workforce, but the rate of decline was moderate. Eurozone manufacturers also recorded a drop in input costs. The reduction was solid, but the least marked in a year. Nevertheless, prices charged for goods were discounted more heavily. Overall, the decrease in output prices was the quickest since last November.