- Prior 50.8
- Manufacturing PMI 48.5 vs 49.3 expected
- Prior 48.8
- Composite PMI 52.3 vs 50.6 expected
- Prior 50.3
The euro area economy is seen posting a modest growth recovery in February, up to a nine-month high in fact. Of note, rising demand, healing supply
chains, order book backlog reduction and improved
confidence underpinned the upturn with employment also continuing to rise. S&P Global notes that:
“Business activity across the eurozone grew much faster
than expected in February, with growth hitting a ninemonth high thanks to resurgent service sector activity and
a recovering manufacturing economy. February’s PMI is
broadly consistent with GDP rising at a quarterly rate of
just under 0.3%.
“Growth has been buoyed by rising confidence as
recession fears fade and inflation shows signs of
peaking, though manufacturing has also benefitted from a
major improvement in supplier performance.
“The pandemic-related delivery delays that dogged
factories over the past two years have given way to faster
delivery times, in turn meaning pricing power is shifting
from suppliers to factory purchasing managers, bringing
industrial price inflation down.
“However, although inflationary pressures have continued
to moderate in February, the survey hints at persistent
elevated price trends in the service sector, linked in part
to higher wage growth, which will concern ECB
policymakers.
“The combination of accelerating growth and stubbornly
elevated price pressures will naturally encourage a bias
towards further policy tightening in the months ahead.”