Economic Buzz: Eurozone PMI slips to 50.5 as growth nearly stalls and cost pressures surge

Eurozone business activity nearly stalled in March, with growth slowing to its weakest pace in ten months. The S&P Global Flash Eurozone Composite PMI fell to 50.5 from 51.9 in February, signalling only a marginal expansion across the region.

The slowdown was mainly driven by the services sector, where activity was close to stagnation. Manufacturing output continued to grow modestly, supported by stronger performance in Germany, although France saw another decline. Activity across the rest of the eurozone also expanded only slightly.

New orders declined for the first time in eight months, largely due to weaker demand in services, while manufacturing orders continued to rise. Export demand remained under pressure, extending a prolonged period of contraction.

A key development in March was a sharp rise in input costs, which increased at the fastest rate in over three years. Higher energy, transport and raw material prices, partly linked to the Middle East conflict, drove the surge. Companies raised selling prices as well, but not as quickly as costs increased.

Supply chain disruptions intensified, with delivery times lengthening significantly. Employment fell slightly for a third consecutive month, and business confidence dropped to its lowest level in nearly a year amid ongoing economic and geopolitical uncertainty.

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