Eurozone Private Sector Growth At 6-Month High

The euro area private sector growth reached a six-month in February, as initially estimated, despite the outbreak of coronavirus, final survey data from IHS Markit showed Wednesday.

The composite output index rose to 51.6 in February from 51.3 in January. A score above 50 indicates expansion.

The eurozone economy showed resilience to disruptions arising from the coronavirus outbreak in February, but dig deeper into the data and there are signs that problems lie ahead, Chris Williamson, chief business economist at IHS Markit, said.

Slightly stronger growth in the private sector was underpinned by a solid gain in service sector activity, alongside a weaker contraction of manufacturing production.

At 52.6, the services Purchasing Managers’ Index was up from 52.5 in January but below the flash 52.8.

Growth rates remained solid in France and Spain, with both registering better performances than in January. However, there were only marginal gains in overall activity in Germany and Italy.

Germany’s private sector logged growth for the third month in a row in February. However, the pace of growth slowed more than initially estimated.

Germany’s composite output index fell to 50.7 from 51.2 in January. This was also below the flash 51.1. Likewise, the services PMI declined to 52.5 from 54.2 a month ago. The flash reading was 53.3.

France’s private sector grew at a faster pace driven by the services activity. The final composite PMI advanced to 52.0 from 51.1 a month ago and stayed slightly above the flash 51.9.

At the same time, the services indicator improved to a four-month high of 52.5 from 51.0, but marginally below the initial score of 52.6.

Italy’s PMI signaled a back-to-back expansion in the private sector output in February. The composite output index rose to 50.7 from 50.4 in January. The service sector grew the most since last October, with the PMI rising to 52.1 from 51.4 in January.

Spain’s private sector economy expanded at a slightly stronger rate in February. The composite output index logged 51.8 compared to 51.5 a month ago. Nonetheless, the services PMI slid for a second straight month, to 52.1 from 52.3 in January.

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