Manufacturing PMI in the Euro Area barely changes in February

Business activity in Euro Area's manufacturing sector maintains stable growth in February 2022, with the Purchasing Managers' Index (PMI) barely changing. According to the flash data by IHS Markit, the indicator stood at 58.4 compared to 58.7 in January 2022. The decline, albeit negligible, is the first since December 2021. The figures suggest that the manufacturing sector in the common currency block is still expanding but at a bit slower rate. The PMI index has a threshold level of 50, which divides contraction from expansion.

The breakdown of the data reveals that the input prices component keeps declining to 81.8 from 83.4. The input prices sub-indicator has been closely monitored in the last months as it is relevant in the current environment of higher inflation and supply chains disruptions. After reaching a peak in October 2021 (90.20) it maintains a downward path which might be a signal that the inflationary pressures a starting to get less pronounced. Output prices growth is showing signs of stabilisation, as this sub-index is hovering around the 70-level for three straight months with the February figure inching down by 0.4 to 72.5.

The indicator stood at 58.4 compared to 58.7 in January 2022

Another indicator relevant for the current issues that the Euro Area is facing, is the suppliers' delivery times index, which increased for the fourth month in a row, surpassing the 30-mark and essentially reaching a one-year high.

The PMI data for the Euro Area further points to a stable labour market, with the relative sub-indicator rising to 57.8, a six-month high.

The two biggest Euro Area economies, Germany and France, develop in opposite directions, in terms of the business activity in their manufacturing sector. Germany sees a deceleration to 58.8, while France experiences faster expansion with the PMI inching up to 57.6 in February 2022.

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