Manufacturing activity across the euro zone accelerated faster than previously thought last month, adding to signs the region’s economy is recovering, a business survey showed on Wednesday.

Any indication of a pick-up in growth will delight the European Central Bank, which embarked on a quantitative easing programme in March, aiming to buy around €60 billion of bonds every month to drive up inflation and spur the recovery.

Markit’s final March manufacturing Purchasing Managers’ Index (PMI) was at a 10-month high of 52.2, beating a flash reading of 51.9. It was the 21st month it has been above the 50 mark that separates growth from contraction.

"The final PMI reading signalled slightly stronger growth of the manufacturing economy than the preliminary reading, adding further to signs that the euro zone economy is reviving after last year's slowdown," said Chris Williamson, Markit's chief economist.

“March saw the sharpest increase in new export orders since April 2014. Companies reported that the weaker euro was the main factor driving new export orders higher.”

Speculation that QE was coming, and its eventual launch, has sent the euro down nearly 12 per cent since January. Factories have benefited as it has not only made exports cheaper but also meant competing imports were more expensive.

A sub-index measuring new export orders, which includes trade within the bloc, jumped to 52.7 from February’s 51.8, helping drive the output index - which feeds into a composite PMI due on Tuesday that is seen as a good growth indicator - to a 10-month high of 53.6.

Factories cut prices for the seventh month running to spur demand, but only marginally. Official data on Tuesday showed euro zone consumer prices fell again in March, as expected, but the decline was the smallest this year.

Reuters