Euro zone business activity bounced back to growth last month, underpinned by a record expansion in manufacturing, according to a survey on Wednesday that also showed the service industry was coping better than expected with new lockdowns.

Europe is battling a third wave of coronavirus infections and governments also struggling with vaccine programmes beset by delays have reimposed curbs on citizens and forced swathes of the dominant services industry to remain closed.

But IHS Markits Services Purchasing Managers Index PMI rose to 49.6 in March from Februarys 45.7, much higher than a flash estimate of 48.8 and only just shy of the 50 mark that separates growth from contraction.

Encouragingly, todays data confirmed the services sector is on the path to recovery, said Maddalena Martini at Oxford Economics.

Despite the health situation remaining fragile and some restrictions being extended, optimism about the vaccine campaigns sends some hopes for the services sector outlook.

A composite PMI, combining manufacturing and services and seen as a good gauge of economic health, rose to 53.2 from 48.8, above the 52.5 preliminary estimate.

Growth in Germanys private sector accelerated to its highest level in more than three years while a slowdown in Frances service sector eased despite tougher COVID19 restrictions.

British businesses, outside the currency bloc and the European Union, saw a strong rebound in orders as they prepared for the relaxation of curbs next week,…