Euro zone private sector business growth was weaker than forecast this month on slowing new orders in the region, dragged down largely by faltering activity in France, a survey showed today.
That news comes despite a big fall in the euro that could support exports, as well as the launch in March of a much-awaited bond buying programme from the European Central Bank.
"The weaker rate of expansion is a big disappointment, given widespread expectations that the ECB's quantitative easing will have boosted the fledgling recovery seen at the start of the year," said Chris Williamson, chief economist at survey compiler Markit.
"However, it's too early to draw firm conclusions about whether growth is faltering again and (about) the effectiveness of policy," he added.
Markit's Composite Flash Purchasing Managers' Index, based on surveys of thousands of companies and seen as a good growth indicator, fell to 53.5, missing even the lowest forecast in a Reuters poll.
A PMI covering the dominant service industry came in below expectations by falling to 53.7, and the dip in the factory PMI to 51.9 also missed the median forecast.
However, they did hold above the 50 mark that separates growth from contraction.
Williamson said the PMI pointed to 0.4% GDP growth in the current quarter, in line with consensus in a Reuters poll this week.
The latest data stands is in contrast to the optimism among economists who say the euro zone economy is now on a sustainable recovery path, as well as positive sentiment in European stock markets which have rallied since the start of the year.
The composite new orders index fell to 53.8, and factories, which barely increased staffing, ran down old orders faster than last month. That related sub-index fell to 49.9.
But Williamson said growth outside of France and Germany accelerated, suggesting the ECB's stimulus was feeding through to the peripheral countries.
Measures of change in prices that companies charge across the euro zone were still pointing to falling prices, but at a slower pace than in March.