Private sector output in the eurozone remained stable in February 2025, according to the latest HCOB Flash Eurozone PMI report.
The HCOB Flash Eurozone PMI Output Index stood at 50.2 in February, the same as in January, however the Services PMI Business Activity Index dropped to 50.7 from 51.3 in January, marking a three-month low.
Elsewhere, the Manufacturing PMI Output Index rose to 48.7, up from 47.1 in January and hitting a nine-month high, while the Manufacturing PMI reached 47.3, also reaching a nine-month high.
As the report puts it, while the pace of expansion in the eurozone private sector is unchanged since the start of the year, new orders continue to fall, while businesses are reducing their staff numbers due to ‘muted demand’.
Confidence has also slipped back to a three-month low, it added.
At the same time, the pace of input cost inflation has accelerated to its fastest rate for nearly two years, with output prices, in tandem, rising at a sharp pace.
Services inflation
Commenting on the data, Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said, “The HCOB PMI price indices for the services sector have risen or remained at a high level. The statements by the ECB President can be interpreted as meaning that inflation can only be considered defeated once the services inflation is under control. The HCOB PMI shows that this is definitely not the case.
“This is partly due to the fact that wage settlements continue to be above average. Interestingly, it can also be observed that input prices for goods are now rising more sharply.”
Variations were evident in different parts of the eurozone, the data showed, with Germany recording its second consecutive month of output growth, with the pace of expansion reaching a nine-month high. France, however, experienced a sharper decline in business activity, marking the steepest contraction in nearly a year and a half.
Economic output
“Economic output in the eurozone is barely moving at all,” de la Rubia added. “The somewhat milder recession in the manufacturing sector is only just being overcompensated for by the barely noticeable growth in the services sector. There is certainly hope for a German government that will be able to act after the elections, which should also provide a positive impetus for the eurozone as a whole.
“However, this is offset by a relatively unstable situation in France and a US customs policy that is spreading uncertainty. These figures therefore do not yet point to a recovery in the eurozone.” Read more here.
