Economic Buzz: Eurozone manufacturing returns to growth as orders and confidence strengthen

The eurozone manufacturing sector had its strongest performance in nearly four years in February, according to the latest HCOB PMI survey. The headline Manufacturing PMI rose to 50.8 from 49.5 in January, moving back above the 50 mark that signals growth for the first time since August.

The improvement was driven by a fresh increase in new orders, which grew at the fastest pace since April 2022. Factory output also expanded again, marking 11 months of growth in the past year. Export demand remained weak but declined at a slower pace.

Six of the eight countries surveyed recorded expansion, including Germany, which saw its sharpest improvement in almost four years. France?s growth slowed after January?s rebound, while Spain stagnated and Austria saw a slight decline.

Despite stronger demand, manufacturing employment continued to fall, though the drop in backlogs was the slowest in more than three-and-a-half years. Purchasing activity nearly stabilized, and supplier delivery times lengthened for a ninth straight month.

Cost pressures intensified, with input prices rising at the fastest rate in just over three years. Manufacturers raised selling prices for a second month in a row, with the increase the strongest since March 2023.

Business confidence improved further, reaching its highest level in four years.

Powered by Commodity Insights