Eurozone business activity grows in March

(BRUSSELS) - Eurozone business activity remains on the path of recovery, a key survey showed Monday, registering in March its strongest period of growth since the first semester of 2011.

Boosted by good news from France, the Eurozone Composite Purchasing Managers Index reached 53.2 in March and follows a 53.3 reading in February. A reading above 50 represents expansion.

And with a slight acceleration in new order growth, the data suggests activity growth could continue in April.

According to the PMI figures compiled by Markit Economics, eurozone employment also rose marginally for the second month in a row, providing the first signs of job creation since June 2011.

The biggest change over the month was seen in France, where output and new orders returned to growth -- the best monthly showing for both indicators since August 2011.

Germany saw its output growth slow to a four-month low, although the rate of expansion overall remains solid with employment in both manufacturing and services rising for a fifth straight month.

According to Martin van Vliet, from Global Economics ING, the fact that eurozone growth held up despite turbulence caused by security concerns in Ukraine was "welcome and fairly surprising" news.

But he warned in a statement that a weakening of China's PMI, along with a relatively strong euro, "do not bode well for export growth momentum," while unemployment and fiscal policy settings mean domestic demand is unlikely to pick up soon.

"That said, the further sign of recovery will encourage the ECB in refraining from further monetary easing, at least in the short term," van Vliet said.