(CercleFinance.com) – Economists say they see a little ‘light at the end of the tunnel’, giving hope for an upcoming recovery in activity in Europe following the better-than-expected PMI indices published in the morning.
The HCOB composite PMI ‘flash’ index measuring overall activity in the euro zone stood at 48.9 in February, compared to 47.9 in January, above the consensus which expected it to be 48.5.
More encouraging, the PMI measuring activity in the region’s services recovered to 50 points, compared to 48.4 in January, marking a seven-month high.
‘The index is now back at a level which has generally been synonymous with growth in the past’, underline Commerzbank analysts.
The German establishment recalls that the euro zone economy has been stagnating since the fall of 2022, with GDP expected to stagnate at best in the first quarter of 2024.
From his point of view, these higher-than-expected PMIs suggest that the region could emerge from stagnation in the spring.
At Capital Economics, we note the favorable signals coming from France, where the composite flash PMI index recovered from 44.6 in January to reach 47.7 this month.
Regarding Germany, the London-based research office says it is concerned about the persistence of inflationary tensions, which according to it validates the patience shown by the ECB in its speech.
‘This means that there is a growing chance that the ECB will wait until June before reducing its rates rather than in April as we expected so far,’ concludes the economic research firm.
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