Eurozone business activity shoots up in March

(BRUSSELS) - Private sector business activity across the eurozone shot up in March, with the largest increase since August 2007 suggesting that an improvement in dire unemployment figures is in the offing.

The purchasing managers' index (PMI) for the 16 countries that share the currency, compiled by data and research group Markit, jumped to 55.5 points from 53.7 points in February, the researchers said.

Any score above the boom-and-bust 50-point line indicates economic growth.

New orders also rose sharply, with new export orders growing at their fastest rate since April 2006.

"The combination of rising demand in key export markets and a competitive exchange rate has helped to boost manufacturing growth to a pace seen only once before in the past 10 years," said Markit chief economist Chris Williamson.

"The service sector also showed some welcome signs of renewed life, growing at the fastest pace since late-2007.

"Taken together, the data for the two sectors are consistent with (Gross Domestic Product) rising by 0.5 percent in the first quarter."

Williamson said that an increase in backlogs of work also "suggests that employment may stabilise or even show modest growth in the near future."

IHS Global Insight analyst Howard Archer said a "weather-related hiccup at the start of 2010" had passed and that the healthier data, especially in manufacturing, "significantly boosts hopes that the eurozone recovery is regaining momentum."