Eurozone business growth near six-year high in March

Markit's flash eurozone composite purchasing managers' index unexpectedly rose in March, to a near six-year high.

The composite PMI, which covers both the services and manufacturing sectors, edged up to 56.7 from 56.0 the month before, beating expectations for a small drop to 55.8 and marking its best level since April 2011.

The flash eurozone services PMI increased to 56.5 from 55.5, beating expectations for a nudge down to 55.3.

Meanwhile, the manufacturing PMI increased to 56.2 in March from 55.4. Economists had been expecting a reading of 55.3.

Chris Williamson, chief business economist at IHS Market, said: "The eurozone economy’s throttle opened further in March, with business activity and hiring surging higher. The March flash PMI rounds off the best quarter for six years and signals GDP growth of 0.6% in the first quarter. Employment growth is meanwhile the best seen for nearly a decade.

"The acceleration in growth towards the end of the quarter, as well as improving trends in new business and an increased appetite to hire, suggest that strong growth momentum will be sustained into the second quarter."

The flash composite PMI for Germany came in at a 70-month high of 57.0 from 56.1 in February, surpassing expectations for a decline to 56.0.

The flash German services PMI rose to 55.6 from 54.4 in February, beating forecasts of 54.6. The manufacturing PMI jumped to a 71-month high of 58.3 in March from 56.8, versus expectations for a reading of 56.5.

The French composite PMI increased to 57.6 in March from 55.9 the month before, hitting its highest level since May 2011 and beating forecasts of 55.6. The index for the services sector increased to 58.5 from 56.4, ahead of expectations for a reading of 56.1.

Meanwhile, the index for the manufacturing sector rose to 53.4 from 52.2, surpassing estimates of 52.4.

Capital Economics economist Stephen Brown said: "After a strong rise in March the euro-zone Composite PMI suggests that the economy might have had its strongest quarter in two years in the first quarter."

Pantheon Macroeconomics said: "The euro area economy is going from the strength to strength according to Markit’s survey. The manufacturing and services PMI both rose, signalling broad-based and strong growth in the private sector.

"Robust new business in both sectors, at a pace close to a six-year high, is the key story, indicating a positive outlook for output in the short term. In addition, respondents report that inflation pressures are rising sharply prompting those who can to raise output prices."