According to a widely followed business survey published on Friday, manufacturing in the Eurozone has returned to expansion territory for the first time in months, hitting its highest level since June 2022.
According to statistics gathered by S&P Global and Hamburg Commercial Bank, the flash Eurozone Manufacturing PMI increased to 50.8 points in February from 49.5 points in January, marking a 44-month high.
The result surpassed the 50-point barrier that distinguishes contraction from expansion and surpassed market expectations. The total private sector activity in the euro area is still growing at a moderate rate, as indicated by the rise in the broader composite index, which combines manufacturing and services, from 51.3 to 51.9.
Due to tighter financial conditions, increased energy prices, and weak global demand, manufacturing has hampered eurozone growth for the most of the last two years. The recovery in February might signal a change.
Given that the headline PMI rose to growth territory, this might mark a sea change for the manufacturing sector, according to Dr. Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. Although the underlying fundamentals seem more stable than during past brief upturns, the economist cautioned that it might be too soon to declare a full recovery.
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