Manufacturing Activity Revised Higher in Europe - Forex News by FX Leaders
The trend has been positive since last May

Manufacturing Activity Revised Higher in Europe

Posted Monday, March 1, 2021 by
Skerdian Meta • 2 min read

The manufacturing activity during this second wave of coronavirus restrictions and lock-downs has been holding up well, compared to the first lock-downs last spring. Services are in recession again in Europe doe to the restrictions, but manufacturing keeps expanding. Today’s revisions for February were positive all over the continent, as the repost below show.

 

German February Final Manufacturing PMI

  • February final manufacturing PMI 56.1 vs 55 expected
  • Initial reading was 56.1 points

French February Final Manufacturing PMI

  • February final manufacturing PMI 60.7 vs 60.6 expected
  • Initial reading was 60.6 points

Eurozone February Final Manufacturing PMI

  • February final manufacturing PMI 57.9 vs 57.7 expected
  • Initial reading was 57.7 points
Operating conditions performed at their strongest in three years as the manufacturing sector is seen holding up strongly in the euro area to start the new year – led by Germany.
That said, supply-side challenges are a key development to take note of although there has been improvement in employment conditions to offset that.
Markit notes:

“Manufacturing is appearing as an increasingly bright spot in the eurozone’s economy so far this year. The PMI has reached a three-year high to run at a level that has rarely been exceeded in more than two-decades of survey history – notably during the dot-com bubble, the initial rebound from the global financial crisis and in 2017-18.

“Producers are benefitting from resurgent demand for goods in both domestic and export markets, linked to post-COVID recovery hopes driving renewed stock building and investment in business equipment and machinery, as well as improved consumption.

“The solid manufacturing expansion is clearly helping to offset ongoing virus-related weakness in many consumer-facing sectors, alleviating the impact of recent lockdown measures in many countries and helping to limit the overall pace of economic contraction.

The growth spurt has brought its own problems, however, with demand for inputs not yet being met by supply. Shipping delays and shortages of materials are being widely reported, and led to near record supply chain delays. Prices paid for inputs are consequently rising at the fastest rate for nearly a decade, hinting at further increases in consumer price inflation in coming months, at least until supply and demand come back into balance.”

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About the author

Skerdian Meta // Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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