Eurozone factory slump eases, raising hopes for recovery

By Gokhan Ergocun

ISTANBUL (AA) - The Eurozone manufacturing sector remained in contraction in February, but the industrial downturn was the least severe since early 2023, S&P Global said on Monday.

The Eurozone Manufacturing PMI, which measures the overall health of eurozone factories, reached a two-year high in February, rising to 47.6 from 46.6 in January.

Factory production came close to stabilizing in February, with reductions in new orders at their softest in nearly three years.

Last month, manufacturers were less aggressive in their purchasing reductions, and backlog clearances continued.

Manufacturing growth expectations were also among the most optimistic since Russia’s full-scale invasion of Ukraine at the start of 2022.

However, factory job losses intensified, hitting their highest level in four years, while cost inflation ticked up.

"It's still too early to call it a recovery, but the PMI hints that the manufacturing sector might be finding its footing,” Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said in the S&P statement.

“So, after almost three years of recession, we could see a bit of growth in the coming months,” he added.

De la Rubia said a quick formation of a government in Germany, political stability in France, and a deal with the US on tariffs would help bolster growth.