Finance
Euro zone factory downturn shows signs of easing in February, PMI shows
Published by Global Banking & Finance Review®
Posted on March 3, 2025
2 min readLast updated: January 25, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on March 3, 2025
2 min readLast updated: January 25, 2026
Euro zone manufacturing shows recovery signs as PMI rises to 47.6 in February. Demand falls at slowest pace in three years, with a hopeful outlook despite U.S. tariff threats.
LONDON (Reuters) - The long-running downturn in the euro zone's manufacturing industry showed further signs of easing last month as demand fell at the slowest pace in almost three years, a survey showed on Monday.
HCOB's final euro zone manufacturing Purchasing Managers' Index, compiled by S&P Global, jumped to 47.6 in February, ahead of a preliminary estimate for 47.3 and closer to the 50 mark separating growth from contraction.
The index has been sub-50 since mid-2022 but rose to 46.6 in January after dipping in December.
"It's still too early to call it a recovery, but the PMI hints that the manufacturing sector might be finding its footing. New orders are falling at the slowest pace since May 2022," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.
The new orders index - a measure of demand - bounced to 47.7 from 45.4.
A reading monitoring output which feeds into a composite PMI due on Wednesday that is seen as a good gauge of overall health soared to nine-month high of 48.9 from 47.1, albeit it still in contractionary territory.
Factories did reduce headcount at a faster pace but their outlook for the year ahead remained hopeful.
"Most companies are staying optimistic about the future. The confidence index is just above the long-term average. This is surprising considering the tariff threats from the U.S.," de la Rubia said.
U.S. President Donald Trump floated a 25% "reciprocal" tariff on European cars and other goods last week.
(Reporting by Jonathan Cable; Editing by Christina Fincher)
The PMI index for euro zone manufacturing rose to 47.6 in February, suggesting a slowdown in the decline of the sector, with new orders falling at the slowest pace since May 2022.
The new orders index increased to 47.7 from 45.4, indicating a slight improvement in demand within the manufacturing sector.
Despite reducing headcount at a faster pace, factories remain optimistic about the future, with the confidence index just above the long-term average.
The manufacturing sector faces tariff threats from the U.S., including a proposed 25% tariff on European cars and goods, which adds uncertainty to the outlook.
The output reading soared to a nine-month high of 48.9 from 47.1, indicating a potential stabilization in the overall health of the manufacturing sector.
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