The eurozone manufacturing sector continued to grow in March, with modest increases in both production and new orders, according to the latest PMI survey.
The Manufacturing PMI rose to 51.6 from 50.8 in February, reaching its highest level since mid-2022. Growth was supported by steady gains in output and new orders, while export demand stabilised after several months of decline.
However, supply-side challenges intensified. Delivery times lengthened at the fastest pace in over three-and-a-half years, largely due to disruptions linked to the Middle East conflict. This also contributed to the rise in the overall PMI.
Manufacturers increased purchasing activity for the first time since June 2022, even as input costs surged. Input price inflation climbed to a 41-month high, driven by higher raw material and energy costs. Companies responded by raising selling prices at the fastest rate in over three years.
Backlogs of work increased for the first time in nearly four years, signalling growing pressure on production capacity. Despite this, employment declined at a faster pace.
Among major economies, Greece and Ireland recorded the strongest growth, while Spain remained in contraction. France showed stagnation, while Germany and Italy posted solid improvements.
Business confidence weakened during the month, falling to a five-month low, as firms expressed concerns over rising costs and ongoing geopolitical uncertainty.