- 48.4 and earlier
- Manufacturing PMI 46.1 vs expected 47.0
- 46.6 and earlier
- Composite PMI 48.9 vs. Forecast 48.5
- Previously 47.9
The weakness in the services sector, which has stabilized in the euro area, is offset by the continuing deterioration in the manufacturing situation. The main factor is none other than Germany, as we saw here earlier. Europe’s largest economy is truly the sick man of the group, there’s no denying that.
Returning to the data, the employment situation remained stable, but price pressures increased markedly in February. Sales price inflation accelerated for the fourth month in a row, with inflation in the month well above the survey’s long-term pre-pandemic average. HCOB points out:
“There are some glimmers of hope as the eurozone inch towards recovery. This is particularly evident in the services sector. The corresponding HCOB PMI is currently at 50 points, contracting for the first time since July last year. The latest PMI results give hope for the eurozone recovery, which is why we stick with our HCOB annual forecast of 0.8% in 2024.The latest jobs report also offers some optimism. There is a view that it has increased at a faster pace than the previous year.Previous month.
“Germany is acting as a brake on euro area growth. While France has recovered more strongly in both the services and manufacturing sectors, Germany is lagging behind. one possible explanation for this is an increase in tourism activity, which may be benefiting France more than Germany.
“Manufacturing is a drag on the European economy, as evidenced by the sharp decline in production and the drag on new orders. The business outlook for the next 12 months remains below the long-term average, which tends to reflect a pessimistic outlook.
“The latest HCOB PMI data is likely to disappoint the ECB. Output prices rose at a faster pace for the fourth month in a row, driven entirely by the labor-intensive services sector, which continues to struggle with wage growth. “Yes. Our expectation that the ECB will cut interest rates for the first time in June remains unchanged.”
