Eurozone PMI Services was finalized at 51.5 in March, up from February’s 50.2, a 9-month high. PMI Composite was finalized at 50.3, up from prior month’s 49.2, a 10-month high.
Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said the service sector is “gradually finding its footing.” He further highlighted the importance of wage growth outpacing inflation, enhancing households’ purchasing power and supporting the service sector’s revival. However, he tempered expectations by noting, “a full-fledged boom is not on the horizon.”
Despite economic challenges, service providers have continued to expand their workforce. Moreover, business expectations within the service industry have soared to their highest in over two years, surpassing the long-term average.
Meanwhile, March witnessed a slight deceleration in inflation regarding both costs and sales prices, a development likely to be viewed favorably by ECB. Despite this positive sign, de la Rubia cautioned against premature conclusions about a turning trend in inflation, maintaining the forecast that interest rate cuts are more likely in June than in April.
