---
title: "Eurozone manufacturing PMI hits a three-and-a-half-year high, driven by Germany's rebound, while France remains hovering below the line of prosperity and recession"
description: "Economic activity in the Eurozone is accelerating, but Eurozone companies have laid off workers for the second consecutive month, with employment in Germany declining, France remaining flat, and emplo"
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/276436278.md"
published_at: "2026-02-20T11:22:38.000Z"
---

# Eurozone manufacturing PMI hits a three-and-a-half-year high, driven by Germany's rebound, while France remains hovering below the line of prosperity and recession

> Economic activity in the Eurozone is accelerating, but Eurozone companies have laid off workers for the second consecutive month, with employment in Germany declining, France remaining flat, and employment rising in other regions of the Eurozone. The chief analyst at HCOB stated that given the stable expansion of economic activity and the persistently high inflation in the services sector, the European Central Bank may continue to maintain its stance on keeping key policy rates unchanged

**Economic activity in the Eurozone accelerated in February, with manufacturing returning to expansion territory, reaching a three-and-a-half-year high**, injecting new momentum into the region's economic recovery. **Germany's manufacturing performance became a key driving force, while the French economy continued to struggle on the edge of contraction**, highlighting the divergence in the pace of recovery within the Eurozone.

Data released by S&P Global showed that the Eurozone's composite PMI rose from 51.3 in January to 51.9 in February, while the manufacturing PMI jumped from 49.5 to 50.8, **reaching a 44-month high and crossing the 50 mark for the first time since last August.** The services PMI slightly increased to 51.8, up from 51.6.

Germany's economy showed significant improvement, with the composite PMI rising to a four-month high of 53.1 and the manufacturing PMI reaching 50.7, marking its first entry into expansion territory since June 2022. In contrast, France's composite PMI rose from 49.1 to 49.9 but still failed to break the 50 threshold, with weak manufacturing continuing to drag down overall performance.

Cyrus de la Rubia, chief analyst at Hamburg Commercial Bank, stated that **given the stable expansion of economic activity and high service sector inflation, the European Central Bank is expected to maintain its stance on keeping key policy rates unchanged.**

## Turning Point for Eurozone Manufacturing

The Eurozone manufacturing sector is showing several positive signals. The manufacturing output index rose to 52.1 in February, the highest level since last August, and for the first time since last August, it exceeded the growth rate of service sector activity. New manufacturing orders saw their first growth after six months of contraction, with the fastest growth rate in nearly four years.

Manufacturing purchasing activity expanded for the first time in three and a half years, although the increase was modest. The pace of decline in purchasing inventories and finished goods inventories both slowed to their slowest in months, marking the lowest declines in 37 months and 30 months, respectively. Supplier delivery times were extended for the ninth consecutive month.

Cyrus de la Rubia noted that the manufacturing foundation appears to be more solid, **with most PMI sub-indicators such as purchase volume, future output expectations, and inventory indicators all above levels seen last August.** However, he also emphasized that new orders need to show better performance in the coming months to instill more confidence in the industry's outlook.

## Germany's Recovery Accelerates, France's Growth Lags

**Germany's economic performance has become the main contributor to the improvement in the Eurozone.** The composite PMI for Germany rose from 52.1 in January to 53.1, and the services PMI increased from 52.4 to 53.4, both reaching four-month highs. The manufacturing PMI reached 50.7, exceeding market expectations of 49.5.

Cyrus de la Rubia stated that this confirms the economic turning point that was particularly evident in January. German industrial orders unexpectedly rose in December, marking the largest increase in two years. He indicated that unless there is a significant decline in March, Germany's GDP may show notable growth in the first quarter. **Increased public spending on defense and infrastructure, along with rising overseas demand, are supportive factors.**

The French economy, on the other hand, continues to struggle. The composite PMI rose from 49.1 to 49.9, slightly better than the market expectation of 49.6, but still remains in contraction territory Economist Jonas Feldhusen from Hamburg Commercial Bank stated that the French private sector still struggles to gain real momentum, primarily dragged down by the demand side, with new orders declining again and export orders faring even worse.

A recent survey by the Bank of France shows that **the country's economy is expected to improve later this year, with growth projected to reach 0.2% to 0.3% this quarter**, driven by strong performance in the defense and aerospace sectors. However, the unemployment rate is expected to rise to 7.9% in the last few months of 2025, a four-year high.

## Employment Contraction, Moderate Demand Growth

Despite an acceleration in economic activity, **Eurozone companies have reduced their workforce for the second consecutive month.** Manufacturing layoffs continue, while employment in the services sector remains flat, **ending a five-year streak of job growth.** Employment in Germany has declined, France remains flat, and other regions in the Eurozone have seen job increases. However, the pace of layoffs in German factories is the second slowest in nearly two and a half years.

Backlogs of orders have declined for nearly three years, with a slight decrease in February, the smallest in four months. New order growth remains moderate, consistent with January's pace. New orders in manufacturing have increased for the first time, but the growth rate of new business in the services sector has slowed. New export business (including intra-Eurozone trade) has declined again, with the drop being roughly in line with January.

Business confidence has slightly retreated from January but remains the second highest in 21 months. Manufacturing confidence has reached a four-year high, while confidence in the services sector is slightly below January but still optimistic about business activity growth in the coming year.

## Inflation Pressures Persist, ECB Expected to Hold Steady

**Input cost inflation has accelerated for the fourth consecutive month, rising to the fastest level in 34 months in February, matching the level of February 2025.** Input costs in manufacturing have risen at the fastest pace since December 2022, while the increase in service input prices has slightly slowed.

**The pace of output price increases has slowed slightly but still recorded the second-fastest growth in the past year.** Sales price increases in manufacturing have accelerated, while those in services have slowed. German companies have significantly raised prices, while French companies have lowered output prices for the first time in three months, with price increases in other Eurozone regions accelerating.

Cyrus de la Rubia noted that price pressures in the services sector eased in February. Costs are still rising rapidly but not as much as last month, and the pace at which companies are raising prices for customers has noticeably slowed. He pointed out that **given the stable expansion of economic activity and high service sector inflation, the European Central Bank may continue to maintain its stance of keeping key policy rates unchanged.**

### Related Stocks

- [XDDX.UK - Xtrackers DAX Income UCITS ETF](https://longbridge.com/en/quote/XDDX.UK.md)
- [EWG.US - ISHRS MSCI Germany](https://longbridge.com/en/quote/EWG.US.md)
- [L5EW.UK - Ossiam Euro STOXX 50 Equal Weight NR UCITS ETF -1C-EUR](https://longbridge.com/en/quote/L5EW.UK.md)
- [513080.CN - Huaan France CAC40 ETF(QDII)](https://longbridge.com/en/quote/513080.CN.md)
- [FEZ.US - SPDR EURO STOXX 50 ETF](https://longbridge.com/en/quote/FEZ.US.md)
- [XDDX.DE - Deutsche Bank AG](https://longbridge.com/en/quote/XDDX.DE.md)
- [DAX.US - Global X DAX Germany ETF](https://longbridge.com/en/quote/DAX.US.md)
- [EZU.US - iShares MSCI Eurozone](https://longbridge.com/en/quote/EZU.US.md)
- [ESTX.AU - ETFS Capital Ltd.](https://longbridge.com/en/quote/ESTX.AU.md)
- [EWQ.US - ISHRS MSCI France](https://longbridge.com/en/quote/EWQ.US.md)

## Related News & Research

| Title | Description | URL |
|-------|-------------|-----|
| 歐元區私營部門的增長有所改善 | 歐元區私營部門的增長在二月份達到了三個月來的最高點，這得益於德國製造業的強勁表現。HCOB 快速綜合產出指數從一月份的 51.3 上升至 51.9，超出市場預期的 51.5。製造業採購經理人指數（PMI）達到了 44 個月來的最高點 50. | [Link](https://longbridge.com/en/news/276442110.md) |
| 歐洲央行估計，數字歐元將在未來四年內使歐盟銀行損失 40 億至 60 億歐元 | 歐洲中央銀行（ECB）估計，引入數字歐元將使歐洲銀行在四年內花費 40 億至 60 億歐元。設立成本預計約為 13 億歐元，運營成本約為 3 億歐元。銀行可以通過向商家收取費用來彌補這些成本，因為它們將提供數字歐元支付所需的智能手機應用程序 | [Link](https://longbridge.com/en/news/276333395.md) |
| 由於德國製造業的復甦，歐元區的商業活動有所上升 | 歐元區的私營部門活動超出預期，德國製造業復甦推動綜合採購經理人指數（PMI）在 2 月份上升至 51.9。德國製造業在超過 3 年半以來首次擴張，得益於政府支出的增加。儘管法國的 PMI 有所改善，但仍低於 50。分析師認為這可能預示着製造 | [Link](https://longbridge.com/en/news/276460357.md) |
| PMI 數據顯示，法國私營部門因需求疲軟而陷入停滯 | 法國私營部門在二月份表現出停滯，HCOB 快速服務採購經理人指數（PMI）為 49.6，低於增長閾值，連續第二個月如此。製造業 PMI 降至 49.9，綜合 PMI 也為 49.9，顯示出持續的困難。新業務流入連續第三個月下降，就業也停滯不 | [Link](https://longbridge.com/en/news/276423742.md) |
| 儘管存在阻力，貿易負責人表示歐盟應該準備好實施南方共同市場協議 | 歐盟被敦促實施與南方共同市場（Mercosur）的自由貿易協議，儘管法國反對並面臨法律挑戰。該協議可能會消除對歐盟出口的 40 億歐元關税，獲得德國和西班牙的強力支持。歐盟貿易專員馬羅斯·塞夫科維奇表示，一旦南方共同市場完成批准，歐盟準備繼 | [Link](https://longbridge.com/en/news/276439605.md) |

---

> **Disclaimer**: This article is for reference only and does not constitute any investment advice.