Eurozone manufacturing growth eases a touch less than expected in February

Growth in the eurozone manufacturing sector eased a touch less than initially estimated in February, according to data released on Thursday.

IHS Markit’s final eurozone purchasing managers’ index fell to 58.6 from 59.6 in January, but was above the flash estimate of 58.5 and the long-run average of 51.8.

The PMI has remained above the 50 mark that separates contraction from expansion for 56 months.

The German PMI fell to 60.6 from 61.1 in January, a touch above the initial estimate of 60.3, while the French PMI declined to 55.9, below the initial estimate of 56.1.

Chris Williamson, chief business economist at IHS Markit, said: "Although the eurozone manufacturing PMI fell for a second successive month in February, the survey data indicate that factories are still enjoying their best growth spell for 18 years. The average PMI for the first quarter so far is the second-highest since the spring of 2000, falling just short of the near-record peak seen in the fourth quarter of last year.

"The broad-based nature of the upturn is especially welcome, with all surveyed countries reporting solid rates of expansion. Even Greece is enjoying its fastest growth for 18 years."

Claus Vistesen, chief European economist at Pantheon Macroeconomics, said: "Overall, these data signal solid momentum in eurozone manufacturing albeit at a slightly slower pace in February compared to the breakneck pace at the start of the year. Growth is strongest in the investment good sector, but all industries are enjoying solid demand conditions.

"The expansion continues to push firms closer to their capacity limits; work backlogs are rising and companies are scrambling to find workers to meet increasing demand. Finally, both input and output price gauges point to much higher inflation pressures in coming months, although we haven’t seen much of this in the CPI data yet."