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    Home > Finance > Euro zone factory downturn shows signs of easing in February, PMI shows
    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 read

    Last updated: January 25, 2026

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    Tags:SurveyGDPeconomic growtheuro areaManufacturing

    Quick Summary

    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.

    Euro Zone Manufacturing Sector Shows Signs of Recovery in February

    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)

    Key Takeaways

    • •Euro zone manufacturing PMI rose to 47.6 in February.
    • •Demand fell at the slowest pace in nearly three years.
    • •Output index reached a nine-month high of 48.9.
    • •Factories reduced headcount but remained optimistic.
    • •U.S. tariff threats pose potential risks.

    Frequently Asked Questions about Euro zone factory downturn shows signs of easing in February, PMI shows

    1What does the PMI index indicate about the euro zone's manufacturing?

    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.

    2How did the new orders index change in February?

    The new orders index increased to 47.7 from 45.4, indicating a slight improvement in demand within the manufacturing sector.

    3What is the outlook for factories in the euro zone?

    Despite reducing headcount at a faster pace, factories remain optimistic about the future, with the confidence index just above the long-term average.

    4What external factors are affecting the euro zone manufacturing sector?

    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.

    5What does the rise in the output reading signify?

    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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