The latest survey of manufacturing and service activity in the 17 countries that share the euro suggests that growth in the region slowed to close the first quarter of the year, according to The Wall Street Journal. On Thursday, Markit Economics reported that its composite purchasing managers’ index for the eurozone fell to 57.5 in March from 58.2 previously, indicating that growth in the private sector slowed during the month. The PMI for manufacturing dropped over a point to 57.7 in March, while the services PMI inched up to 56.9 from 56.8 the prior month.
The report estimated from the last three PMI’s that eurozone economic growth for the first quarter of 2011 reached 0.8%, which would represents an acceleration from the 0.3% growth during the fourth quarter of 2010. However, the surveys showed that the price of raw materials surged at the fastest rate since July 2008 in March, led by a sharp spike in oil prices. Manufacturers raised output prices in response by the fastest rate since the survey began 2002. Ben May of Capital Economics said, “The economy made a strong start to 2011,” adding his view that the European Central Bank, “Will push ahead with its planned interest rate hike in April” to curb inflationary pressure.