Euro Area: Business-activity slump softens in January

Euro Area PMI February 2024

Euro Area: Business-activity slump softens in January

The HCOB Global Composite Purchasing Managers’ Index (PMI) rose to 48.9 in February from 47.9 in January. However, the index remained entrenched below the 50 no-change threshold, signaling another deterioration in business conditions compared to the prior month.

The services sector stabilized in February, improving from January’s contraction, while the manufacturing PMI recorded a somewhat sharper pace of contraction. Output and new orders continued to fall albeit at softer paces, while business confidence improved. Moreover, employment increased for the second consecutive month. On the price front, both input and output price inflation accelerated.

Commenting on the release, ING’s Bert Colijn stated:

“The composite PMI increased […], indicating that the eurozone’s economic slump is easing. The impact of the Red Sea disruptions on eurozone production appears to be easing, but services inflation remains a hurdle for bets on early ECB rate hikes.”

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