Photographer: Christophe Morin/Bloomberg

Euro Area Growth Stays ‘Sluggish’ as Markit Index Revised Lower

The euro-area economy grew slower than initially anticipated at the end of the first quarter, according to Markit Economics, which revised down a key index of activity.

Markit said its composite Purchasing Managers Index rose to

53.1 in March from 53 in February. While that’s above the 50 level that divides expansion from contraction, it’s below the initial reading of 53.7 published March 22.

“The euro-zone economy failed to show any significant gain in momentum,” said Chris Williamson, chief economist at Markit in London. “Sluggish growth is the result of lacklustre demand, accompanied by falling prices as firms compete at the expense of profit margins.”

The euro economy probably grew 0.3 percent in the first quarter, according to Markit, matching the pace of the previous three months. With inflation in the region far below its goal, the European Central Bank unleashed another wave of stimulus last month to revive demand and price growth.

Markit’s services PMI fell to 53.1 in March from 53.3 in February, it said on Tuesday. That’s a downward revision from the initially published reading of 54.

ECB Executive Board member Peter Praet said on Monday that policy makers will keep acting “forcefully,” if needed, to help the economy.

Williamson said “hopes are pinned” on the efforts of ECB officials and an increase in service sector optimism “suggests that firms are taking a more positive view of the outlook.”

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