• Prior 46.6

Despite Germany's woes, the overall Eurozone manufacturing sector is seeing better days in February. New orders and purchasing activity saw their slowest contractions since March last year, although output held unchanged to January - which was the joint-weakest in ten months. This snapshot gives a better overview of how things are progressing across the region:


HCOB notes that:

“The eurozone’s one-year industrial recession is not coming to an end. Output has declined again at the same pace as the previous month, mainly due to the heavyweights Germany and France. Spain, by contrast, is the first of the leading four euro countries to re-enter growth territory. On a slightly more positive note, the decline in new orders in the Eurozone has softened somewhat, offering a glimmer of hope for a potential demand recovery in the future.

“The attacks by the Houthis on commercial vessels in the Red Sea have had a temporary impact, leading to a brief lengthening of delivery times in January, followed by a subsequent reduction in lead times in February. Consequently, the softer decline in input prices this month is unlikely to be wholly attributed to tensions in the Red Sea but rather to movements in commodity prices, such as the recent rise in oil prices. The fundamental trend of lower demand, which remains the primary driver of faster delivery times, continues to persist.

“Stock of purchases continues to deplete rapidly, albeit at a slightly softened pace for the second consecutive month. Despite this minor moderation, there is little indication of an imminent end to the ongoing one-year-long inventory run-down.

“Prospects regarding future output remain cautiously optimistic, although the index is still slightly below the long-term average, reflecting the prevailing subdued environment. Similarly, employers are reducing their workforce, but with a reluctance to adopt overly aggressive measures in this regard. As a result, the overall sentiment is not one of anticipating an exceptionally bright future, yet firms are also not bracing for depressive times. Instead, it appears that businesses are maintaining their operations, poised to spring back into action when the signs of improvement materialise. They are in a kind of waiting position.”