Eurozone recovery picks up pace, eases recession fears: PMI

LONDON—The recovery in business activity in the euro zone has accelerated last month as growth in its key services sector accelerated, providing the latest evidence to suggest that the currency union will avoid a recession. provided.

S&P Global’s Composite Purchasing Managers Index (PMI) is considered a good barometer of overall economic health, rising to an eight-month high of 52.0 from 50.3 in January.

February was the second straight month above the 50 mark that separates growth from contraction.

“The strong increase in business activity in February will help ease fears of a recession in the eurozone for the foreseeable future,” said Chris Williamson, chief business economist at S&P Global.

“There are clear signs that business confidence has picked up from the lows seen late last year, aided by diminished concerns about energy markets, a sign that inflation has peaked and recession risks have eased. there is.”

The future output index, an optimistic indicator of the future, rose to 61.2 in February, up from a one-year high of 60.4.

The PMI covering services rose sharply from 50.8 to 52.7, just below the preliminary reading of 53.0.

Demand picked up and businesses were able to build backlogs of work for the first time since October. The new business index jumped from 50.1 to 52.2.

Strong demand business across the region pushed prices higher again, albeit at the slowest pace in over a year.

“However, signs of continued rising sales prices, combined with the remarkable resilience of the economy, will push the ECB to tighten monetary policy more aggressively, posing downside risks to demand growth in the coming months. There are concerns that,” Williamson said.

Economists polled by Reuters say another 50 basis points rise in the European Central Bank’s deposit rate this month is a completed deal, with another 25 basis points rise expected next quarter, with a final interest rate of 3.25%. I expect it to be