Euro area services PMI likely edged up on flash estimate in March

Euro area’s flash PMIs rebounded strongly in March, indicating that worries regarding global market volatility and global economy have recently alleviated considerably. The currency bloc’s services figures surprised on the upside, increasing to 54 from 53.3, while the composite figure reached 53.7. According to Societe Generale, final composite figure might be somewhat higher after Germany’s manufacturing PMI rebounded from the flash estimate.

Country wise, Spain’s PMI is expected to be impacted by the political gridlock. Especially, a slight decline is expected in Spain’s services that have signalled slowing momentum in PMIs, noted Societe Generale. However, the figure is likely to remain at relatively high level of 53.9, added Societe Generale. Germany and Italy are expected to have contributed the most for the strength seen in the euro area’s flash reading.

“We expect a rise in the Italian services PMI from 53.8 in February to 55.0 in March”, says Societe Generale.

Germany and France are unlikely to post any change in their services PMI from their flash readings.

“Overall, the composite figure for the euro area should edge up on the flash estimate to 53.8, which is historically consistent with GDP growth of around 0.4% qoq”, noted Societe Generale.