Strong Eurozone Manufacturing PMI in March Raises Optimism Amid Looming US Tariffs

The Eurozone Manufacturing Purchasing Managers’ Index (PMI) rose to 48.6 in March, up from 47.6 in the previous month, though slightly below the consensus forecast of 48.7.

This latest increase brings the index closer to the 50 threshold that separates contraction from growth, offering a glimmer of optimism as the region’s struggling manufacturing sector showed early signs of recovery. Notably, output expanded for the first time in two years.

March marked the third consecutive monthly rise in the PMI, with a surge in orders from the US playing a key role in the improvement. However, economists remain cautious, warning that potential US trade tariffs could threaten the recovery.

US President Donald Trump is set to unveil a broad tariff proposal on April 2, following previous measures on aluminium, steel, automobiles, and higher tariffs on Chinese imports.

Despite these concerns, manufacturers remained optimistic about the future. The future output index dipped only slightly to 59.9 from 60.1, staying above its long-term average.