Eurozone PMI services was revised up to 52.8 in February, from initial reading of 52.3. It’s also an improvement from January’s final reading of 51.2. PMI composite was finalized at 51.9, up from prior month’s 51.0. Improvements were also seen across the countries. Italy PMI composite rose to 2-month high of 49.6. France reading rose to 3-month high of 50.4. Germany reading rose to 4-month high of 52.8.
Chris Williamson, Chief Business Economist at IHS Markit said:
“The final PMI for February indicated a slightly improved performance compared to the flash estimate, lifted higher than January in part due to the further easing of one-off dampening factors such as the yellow vest protests in France and new auto sector emissions rules. However, the survey remained subdued as other headwinds continued to increasingly constrain business activity. These include slowing global economic growth, rising geopolitical concerns, trade wars, Brexit and tightening financial conditions.
“Measured overall, the survey shows the quarterly rate of GDP growth picking up to 0.2% in February from 0.1% in January, meaning the first quarter could see the eurozone economy struggle to beat the 0.2% expansion seen in the fourth quarter of last year.
“Manufacturing remains especially fragile, with an increased rate of decline of new orders and signs of excess capacity relative to sales boding ill for future production.
“While the service sector is showing greater resilience, inflows of new business remained worryingly weak, providing little hope for any noticeable improvement in performance in the coming months.
“Price pressures have meanwhile cooled to the lowest for a year-and-a-half amid a stagnation of demand, thereby adding to the suggestion that policymaking will turn increasingly dovish.”
