Eurozone Manufacturing Shows Signs of Recovery in February 2026

In February 2026, the Eurozone manufacturing sector demonstrated a notable recovery, with the flash Purchasing Managers' Index (PMI) rising to 50.8, up from 49.5 in January. This marks the highest level since June 2022 and indicates a return to expansion for the first time in several months. The broader composite PMI, which includes both manufacturing and services, also increased to 51.9 from 51.3, signaling moderate growth in overall private sector activity across the euro area.

Eurozone flash Composite PMI expands faster than expected to 51.9 in FebruaryEurozone manufacturing returns to growthFebruary PMIs point to positive growth momentum for EurozoneEuro area: PMI recovery supports moderate growth – Commerzbank

Germany, the Eurozone's largest economy, played a pivotal role in this rebound. Its manufacturing PMI surged to 50.7 from 49.1, marking the end of over three years of contraction. The increase in new orders, particularly from abroad, and the rise in order backlogs for the first time since mid-2022, suggest a strengthening manufacturing base. Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, noted that "German industry is growing again," attributing this growth to higher public spending on infrastructure and defense.

EuronewsEurozone manufacturing returns to growthEurozone business activity up on German manufacturing revivalEuro Area Manufacturing PMI Tops ForecastsFebruary PMIs point to positive growth momentum for Eurozone

In contrast, France's economic performance remains lackluster. The French composite PMI stood at 49.9, indicating stagnation, with manufacturing slipping back into contraction and services output declining. Junior economist Jonas Feldhusen from Hamburg Commercial Bank highlighted that "the main drag continues to come from the demand side," as new orders, particularly for exports, have continued to decline.

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The recovery in manufacturing comes alongside renewed cost pressures. Input prices across the Eurozone rose at the fastest pace since December 2022, driven primarily by manufacturing. In Germany, energy prices have increased significantly, contributing to higher purchase costs. While companies have managed to pass some of these costs onto customers, the overall pace of selling price inflation has eased slightly.

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The mixed economic signals present a challenge for the European Central Bank (ECB). With manufacturing activity expanding and inflationary pressures resurfacing, the ECB is likely to maintain its current policy stance. Analysts suggest that the ECB is satisfied with inflation levels aligning with its 2% target and sees no immediate need for policy adjustments.

Eurozone business activity up on German manufacturing revival

February's data indicates that the Eurozone economy is on a more stable footing than in recent months, yet the recovery remains uneven and susceptible to renewed cost shocks. While the resurgence in German manufacturing offers a glimmer of hope, France's stagnation underscores the challenges that persist within the Eurozone. The coming months will be critical in determining whether this recovery can be sustained without exacerbating inflationary pressures.

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• “This could be the turning point for the manufacturing sector as the headline PMI increased to growth territory,” — Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank

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• “Hurray, German industry is growing again.” — Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank

Eurozone flash Composite PMI expands faster than expected to 51.9 in February

• “The main drag continues to come from the demand side as new orders declined yet again, with the situation looking even worse for export orders,” — Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank

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