Eurozone Private Sector Continues To Contract In February
The euro area private sector continued to contract in February,
as extended lockdown measures weighed on the service sector, flash
survey results from IHS Markit showed on Friday.
The composite output index rose to 48.1 in February from 47.8 in
January. The expected reading was 48.0.
The score has been below 50.0 for the fourth consecutive month
suggesting contraction. The survey revealed that the service sector
downturn was offset by faster manufacturing growth.
The services Purchasing Managers' Index fell to 44.7 from 45.4 a
month ago. Economists had forecast a reading of 45.9.
On the other hand, the manufacturing PMI surged to a 36-month
high of 57.7 from 54.8 in the previous month. This was above
consensus forecast of 54.3.
Ongoing COVID-19 lockdown measures dealt a further blow to the
eurozone's service sector in February, adding to the likelihood of
GDP falling again in the first quarter, Chris Williamson, chief
business economist at IHS Markit said.
The deterioration in output was driven by the service sector. In
contrast, manufacturing output growth accelerated to the fastest
Business expectations improved to the highest for nearly three
years as companies looked ahead to vaccine roll-outs.
However, surging demand and constrained supply contributed to a
further marked rise in prices during the month. Average prices paid
for inputs by manufacturers rose at a rate not seen since 2011. At
the same time, a more moderate rise in costs was seen in the
Overall average rates charged for both goods and services were
unchanged in February. France's private sector shrank at a faster
pace in February. The composite output index fell to a three-month
low of 45.2 in February from 47.7 in January. Service providers
posted another decline in activity, while manufacturers saw a
moderate expansion. The services PMI dropped sharply to 43.6 from
47.3 in January. The score was forecast to fall marginally to
The manufacturing PMI came in at 55.0 in February, up from 51.6
in January. The expected score was 51.4.
Meanwhile, Germany's private sector expanded further driven by
the strong rebound in manufacturing despite increasing supply-side
The composite output index rose to 51.3 in February from 50.8 in
January. Economists had forecast the score to fall to 50.5.
While Covid-19 lockdown measures continued to weigh on activity
across large parts of the services economy, factories reported
strong and accelerated growth due in part to surging export
The manufacturing PMI surged to a 36-month high of 60.6 from
57.1 in January. The score was above economists' forecast of
Meanwhile, the services PMI fell to a 9-month low of 45.9 from
46.7 in the previous month. This was below the expected 46.5.