Services Sector Slows as Input Costs Moderate
The services sector, while still in expansion, lost momentum in March. The Flash Eurozone Services PMI dipped to 50.4 from 50.6 in February, reflecting subdued new business demand. German services activity underperformed sharply at 50.2 versus a forecast of 52.3, signaling a weakening outlook despite previous strength. France posted a modest gain to 46.6, slightly above expectations but still in contraction. Price pressures in the services sector eased, with slower input cost growth—welcome news for the ECB as it weighs monetary policy decisions.
Inflation Signals and Policy Implications
The slowdown in price growth across both manufacturing and services will likely be seen favorably by ECB doves. Input cost inflation in services moderated, hinting at reduced wage pressures, while selling prices in manufacturing…
Read More
