The contraction in private sector activity in the euro zone continued in February against a backdrop of weak demand, even though businesses were optimistic about the year ahead, according to the S&P survey of of purchasing managers published Friday.
The final HCOB PMI for the sector fell to 46.5 in February, compared to a “flash” estimate of 46.1, after a reading of 46.6 in January. It thus remains below the 50 mark which separates contraction and growth in activity.
The subindex measuring production, which goes into calculating the composite PMI, remained stable at 46.6, above the flash estimate of 46.2.
“The industrial recession that the euro zone has been experiencing for a year is not coming to an end. Production has again declined at the same rate as the previous month, mainly because of the heavyweights Germany and France,” writes Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.
Factories in the euro zone reduced their workforce for the ninth month and, as has been the case for almost two years, order books also fell, the survey shows.
The new orders index is below 50 for the 22nd consecutive month.
But in an encouraging sign, the future production index, an indicator of optimism, remained stable at 57.1 in January, which was the highest level since last April.
(Written by Jonathan Cable; French version Claude Chendjou, edited Kate Entringer)