Eurozone business activity strengthened modestly in February, with services providing continued support to the region’s fragile recovery. The final PMI Services reading came in at 51.9, up from January’s 51.6. PMI Composite index was finalized at 51.9, up from 51.3 in the previous month
Among the major economies, Germany led the expansion with a composite reading of 53.2, marking a four-month high. Italy followed with a reading of 52.1, while Spain registered 51.5 despite slipping to a nine-month low. Ireland also remained in expansion territory at 52.5. France remained the weakest performer, however, with a composite reading of 49.9, still slightly below the 50 threshold separating expansion from contraction.
According to Cyrus de la Rubia of Hamburg Commercial Bank, the data suggest the ECB may have little reason to consider additional rate cuts in the near term. He noted that service sector costs remained elevated in February, driven by higher wages as well as rising energy and transport expenses. Germany could increasingly become the growth engine of the Eurozone, as expanding infrastructure and defence spending begin to support broader economic activity.
