Eurozone Business Activity Climbs to a 7-Month High

The Flash Eurozone Composite PMI Output Index, a key indicator of both services and manufacturing business activity across the region, has risen to 50.4 in March from February's 50.2, marking its highest level in seven months. This preliminary data was released by S&P Global in collaboration with Hamburg Commercial Bank (HCOB) on Monday.

Mixed Signals Across Sectors

While the Flash Services PMI Business Activity Index slightly decreased by 0.2 points to 50.4, hitting a 4-month low, the manufacturing sector showed signs of robust growth. The Flash Eurozone Manufacturing PMI reached a 26-month peak at 48.7, signaling a potential turnaround for the industry.

Economic Implications and ECB's Watchful Eye

"The price trends in the services sector, closely monitored by the ECB, are likely to please the more dovish members of the monetary authority," noted HCOB Chief Economist Cyrus de la Rubia. He also highlighted the moderate price increases in manufacturing, aided by falling energy costs, but cautioned about looming risks such as possible US retaliation tariffs that remain on the ECB's radar.