Eurozone manufacturing sector returns to growth in February

2nd Mar 2026 10:04

(Sharecast News) - The eurozone manufacturing sector returned to growth in February, with activity expanding at the fastest pace in nearly four years, according to a survey out on Monday.

The S&P Global eurozone manufacturing purchasing managers' index rose to 50.8 from 49.5 in January.

This marked the biggest improvement since June 2022, with the index above the 50.0 mark that separates contraction from expansion for the first time since August last year.

In terms of countries, Germany was the standout performer, returning to growth for the first-time in over three and a half years, with the manufacturing PMI rising to 50.9 in February from 49.1 the month before.

France was the only country to show a slowdown in manufacturing activity, with the PMI falling to a three-month low of 50.1 last month from January's 43-month high of 51.2.

Dr. Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said there seems to have been broad-based recovery of the eurozone manufacturing sector, with six out of the eight surveyed countries now in growth territory.

"Among the four economic powerhouses of Europe, Germany is showing the fastest growth rate in manufacturing," he said. "To be sure, we are not talking about a boom, but a moderate recovery coming from a low activity level amid persisting structural challenges like high energy prices, intense competition from China and US tariffs, among other things.

"Input price increases have now accelerated for four straight months and even picked up sharply in February. Several survey participants pointed to higher energy and metal prices, as well as the carbon capture adjustment mechanism that kicked in at the start of the year. Companies were able to pass part of these cost increases on to customers, but it's likely that their margins still took a bit of a hit.

"Companies of the manufacturing sector are quite optimistic about their ability to sell more goods in the future and their expectations for production are even higher than they were one month before. This good mood comes especially from Italy and Germany.

"In Germany, this is most probably to do with higher public spending in infrastructure and defence, from which Italy, as one of the main trading partners of Germany, may also take some advantage. A similar development can be seen in the context of new orders. They have increased in the eurozone and this is driven by Germany and Italy, while factories in France and Spain are faced with fewer new orders."