Eurozone factory growth steady in Feb; hiring and exports pick up: PMI

[BENGALURU] Eurozone manufacturing growth steadied in February to match January's six-month high, helped by a weaker euro that boosted export orders and a faster pace of hiring, a business survey showed on Monday.

But the latest Markit Eurozone Manufacturing Purchasing Managers' Index (PMI) still pointed to only a modest pace of growth across factories in the region.

"The eurozone manufacturing sector barely expanded in February, highlighting the malaise that still hangs over the region's goods-producing economy as a whole," said Chris Williamson, chief economist at Markit.

"However, beneath the disappointing headline figure, different parts of the manufacturing economy are clearly moving at very different speeds, ranging from an (Irish) boom to a (French) slump."

The manufacturing PMI held steady at 51.0 in February, slightly below an earlier flash reading of 51.1 and just above the 50 threshold that denotes growth.

An output index, which feeds into a composite PMI due on Wednesday that is seen as good growth indicator, was also unchanged at 52.1 in February compared to the previous month.

But new export orders rose at the fastest pace since July last year, suggesting a weakened currency is helping drive demand from abroad. That may have encouraged firms to take on staff at the quickest rate since April last year.

After factory gate prices fell in January at the steepest rate since mid-2013, the pace of decline eased last month, which could hearten European Central Bank policymakers who are keen to reverse a bout of falling prices.

But a separate Reuters poll conducted this week showed just half of economists expect the ECB's money printing stimulus, which starts this month, to push consumer price inflation closer to its target of just under 2 per cent.

REUTERS