LONDON (Reuters) – The euro zone’s long-suffering manufacturing industry showed initial signs of a meaningful recovery last month as output rose for the first time in two years, a survey showed on Tuesday, but the upswing could be hurt by U.S. trade tariffs.
HCOB’s final euro zone manufacturing Purchasing Managers’ Index, compiled by S&P Global, bounced to 48.6 in March, just below a preliminary estimate for 48.7 but much closer to the 50 mark separating growth from contraction. The index has been below that line since mid-2022.
A measure of output, which feeds into a composite PMI due on Thursday, jumped to 50.5 from 48.9.
“Things are looking up. The PMI has increased for the third month in a row and the output index even surpassed the threshold for growth,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.
“A significant part of this movement may have to do with the frontloading of orders from the U.S. ahead of the tariffs, which means some backlash is to be expected in the coming months.”
U.S. President Donald Trump is set to announce a comprehensive tariff proposal on what he’s called “Liberation Day” on Wednesday, after implementing levies on aluminium, steel, and automobiles, along with increased tariffs on all goods from China.
Still, factory manufacturers remained optimistic about the year ahead. The future output index only nudged down to 59.9 from 60.1, holding above its long-run average.
(Reporting by Jonathan Cable; Editing by Hugh Lawson)
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