The final data published by HCOB showed that activity in the eurozone private sector rose to an 8-month high in February, but remained in contract territory. Meanwhile, amid reports of persistent wage pressures, overall operating costs rose to the strongest extent in ten months.
The Eurozone Composite PMI Output Index, which assesses the change in activity in the manufacturing sector and the service sector, rose in February to 49.2 points from 47.9 points in January. Economists had expected an increase to 48.9 points. The index remains below the 50-point mark, which indicates a reduction in activity in the sector, for the ninth month in a row. A rejuvenation in the service sector was evident, where activity levels rose for the first time since July last year (services PMI reached 50.2 compared to 48.4 in January and forecasts at 50). The downturn in the manufacturing sector, albeit cooling, continued to offset this, however.
The data also showed that total output volumes fell for a ninth consecutive month, but the contract was marginal and the slowest since June 2023. However, new export orders declined at a faster rate than total orders. Outstanding business volumes fell solidly, but to the weakest extent in eight months. Meanwhile, the rate of employment growth, albeit modest, was at a seven-month high and fractionally faster than seen across the survey history on average. The data also indicated a further increase in business optimism (the 5th consecutive monthly increase). In fact, growth expectations were in line with the series trend (going back to July 2012). On the inflation front, purchasing inflation reached a 10-month high, while selling prices rose at the fastest pace since May 2023.