Euro zone
The euro sculpture is partially reflected in a puddle on a cobblestone pavement in front of the headquarters of the European Central Bank in Frankfurt, Jan. 21, 2012. Reuters/Kai Pfaffenbach

The European economy is now seeing an inclusive renaissance of sorts, according to the latest data on economic output released by Markit on Thursday.

The economies of former laggards such as Spain, France and Italy too seem to be on the mend while output growth in Ireland surged to a seven-year high and the dependable German economy produced enough to come in at second place, a Markit statement said.

“The final PMI data for March round off the region’s best quarter for three years,” Chris Williamson, Markit’s chief economist, said in the statement, adding: “The surveys also confirm that the recovery is broad-based.”

The final Eurozone Composite Output Index stood at 53.1 in March, slightly down from 53.3 in February, but marking a growth in output for the ninth successive month. The region is expected to have grown at 0.5 percent in the first quarter of the year, according to Markit, and the outlook for the euro zone also remains positive as order books of local companies fill up and jobs are created at a steady pace.

The data, which measures output in the manufacturing and services sectors, showed Germany continued to drive growth in the region. Output growth in France, although continuing to lag behind, moved back into expansion territory after contracting in each of the past four months.

Spain is projected to have grown by 0.5 percent for its best quarter in six years while Italy, which registered a three-month low in overall output growth in March, is expected to have clocked its best growth performance in three years, and is set to expand by 0.3 percent in the last quarter.

“It is reassuring to see services growing at the fastest rate since the first half of 2011, as this provides further signs that domestic demand is reviving,” Williamson said, in the statement.

While the region seems to be steaming steadily toward a recovery, the usual bugbears such as record unemployment and fears of deflation provide a reminder that the road to a complete turnaround is not without risks.

“The recent improvement in the PMI (purchasing managers' index) suggests the region’s recovery in terms of economic growth is in line with policymakers’ expectations,” according to Williamson, but, “weakening price indices will stoke fears that deflationary forces are intensifying amid weak demand and near-record unemployment.”