Eurozone (Feb) HCOB Eurozone manufacturing PMI actual: 50.8 vs 49.5 previous; est 50.0
TL;DR
Eurozone manufacturing PMI rose to 50.8 in February 2026, exceeding estimates and indicating sector expansion for the first time in over a year, driven by new orders and metal prices. However, services sector PMI declined slightly, and mixed economic data highlight challenges in sustaining broad-based growth amid inflationary pressures.
Eurozone (Feb) HCOB Eurozone manufacturing PMI actual: 50.8 vs 49.5 previous; est 50.0
Eurozone Manufacturing PMI Surpasses Expectations in February
The Eurozone’s HCOB Flash Manufacturing PMI rose to 50.8 in February 2026, marking a significant improvement from the previous reading of 49.5 and exceeding the estimated 50.0. This indicates the sector expanded for the first time in over a year, driven by robust new orders and rising metal prices. The uptick in manufacturing activity contrasts with the services sector, which is expected to contract slightly, with its PMI declining to 51.4 from 51.6.
The composite PMI for the Eurozone remains steady at 51.3, reflecting sustained economic activity despite mixed sectoral performance. The manufacturing rebound suggests improving industrial demand, though services—accounting for a larger share of the economy—continue to face headwinds.
Additional data highlights wage growth trends in the region. The ECB’s negotiated wages indicator, which tracks collectively bargained wage increases, is projected to rebound to 2.9% year/year in Q4 2025, up from 1.9% in Q3. This rebound follows distortions in Q3 caused by one-off payments, signaling potential upward pressure on inflationary expectations.
Market reactions to the data have been mixed. The EUR/USD pair fell below 1.18 amid broader USD strength, influenced by geopolitical tensions and higher oil prices. Meanwhile, European equities saw modest declines, with defensive sectors outperforming.
The Eurozone’s manufacturing expansion underscores resilience in industrial output, but the services sector’s slowdown highlights ongoing challenges in sustaining broad-based growth. With inflationary pressures and wage dynamics in focus, policymakers may weigh these developments as they navigate monetary policy decisions in the coming months.
