The euro area’s two largest economies saw private-sector growth return, snapping months of contractions as easing supply shocks and an unusually mild winter provide respite.
S&P Global’s flash Purchasing Managers’ Index for Germany rose to 51.1 in February – much better than the 50.3 median estimate in a Bloomberg survey and the first time since June that the gauge was above the 50 threshold that signifies an expansion.
The French measure clocked in at a seven-month high of 51.6 – defying economist expectations for a fourth straight contraction.
A year after Russia attacked Ukraine, much of Europe has weathered the worst of the fallout and the 20-member euro zone looks increasingly likely to avoid a recession. Consumer confidence is at a one-year high and inflation – though still uncomfortably high – has moderated in recent months.
Tuesday’s data show Germany’s economic rebound was broad based, though “with manufacturing new orders still in contraction territory, goods producers remain only cautiously optimistic about the year-ahead outlook,” S&P said.
In neighbouring France, “it’s difficult to say for certain if we’re at an inflection point and the French economy is now on its path to recovery,” senior S&P economist Joe Hayes said Tuesday in a statement.
“The manufacturing sector downturn intensified in February, and demand conditions within this sector are clearly still fragile,” he said.
The numbers follow a slight advance in Australia’s PMI and an unchanged growth reading in Japan. UK and US numbers later Tuesday are expected to show improvements, but still indicate contractions.--Bloomberg
