The eurozone economy stayed in expansion during February, although the rate of growth was unchanged from January and therefore only marginal overall.
Other data released as part of the HCOB PMI survey suggested the upturn was a fragile one, with demand conditions remaining unsupportive as new business volumes shrank further. Meanwhile, business confidence weakened slightly and workforce numbers declined for a seventh month in succession.
Inflationary pressures across the euro area picked up, with input costs rising at the sharpest pace in almost two years. Firms were subsequently more aggressive with their pricing, raising charges to the most marked extent since April 2024.
The seasonally adjusted HCOB Eurozone Composite PMI Output Index – a weighted average of the HCOB Manufacturing PMI Output Index and the HCOB Services PMI Business Activity Index – remained unchanged at 50.2 in February. Coming in just above the neutral 50.0 mark, the headline figure signaled growth in the eurozone economy, albeit at a rate that was only marginal overall and well below its long-term average (52.4).
The HCOB Eurozone Services PMI Business Activity Index signaled a third successive monthly expansion in output. However, at 50.6 in February, the measure was down from 51.3 in January to a three-month low, indicating a loss of growth momentum.
Weighing on the strength of the upturn was a renewed drop in new business. For the first time since last November, new orders decreased. Demand for euro area services from non-domestic customers weakened, but to the softest extent in seven months.
A pick-up in activity alongside lower new order intakes facilitated yet another drop in backlogged work in February. Stronger inroads to incomplete business were made, with the pace of depletion at its quickest for just over a year.
Eurozone service providers still lifted employment levels, albeit to an extent that was only marginal overall and softer than in January.
Cost pressures remained elevated, with input costs increasing at a rate unchanged from January’s nine-month high. In turn, the latest survey data pointed to another historically sharp rise in output prices that was the most substantial for ten months.