Eurozone Business Activity Growth Accelerates in February

The HCOB Eurozone Composite PMI climbed to 51.9 in February 2026, up from 51.3 in January, marking the strongest expansion in private sector activity in three months. The reading signaled a firmer pace of growth across the euro area economy. Growth was driven by stronger manufacturing and services output, with Germany leading the upturn. Ireland and Italy also posted solid gains, while growth slowed in Spain and France stagnated. New orders increased at a faster pace overall, despite a continued decline in export business. Employment levels were broadly stable, showing little change from the previous month. On the price front, input cost inflation accelerated for the fourth consecutive month, reaching its highest level in nearly three years. Output price inflation eased slightly but remained elevated, marking the second-steepest increase in the past year. Meanwhile, business confidence improved, rising to its strongest level since May 2024.

The HCOB Eurozone Composite PMI rose to 51.9 in February 2026 from 51.3, beating expectations of 51.5, according to a preliminary estimate. The data signaled the strongest expansion in private sector activity since November, driven by the sharpest rise in manufacturing output since August 2025 and faster growth in services. Meanwhile, new orders increased only marginally, as foreign demand continued to decline. Employment slipped slightly for a second straight month, and backlogs of work extended their downturn. On the pricing front, input cost inflation accelerated to its joint-fastest pace in 34 months, while output price growth eased modestly. Business confidence edged lower but remained the second-highest level in 21 months.

The HCOB Flash Eurozone Composite PMI inched lower to 51.3 in January of 2026 from the 51.5 in the previous month, revised downwards from 51.5 and under the initial market expectations of 51.8. Despite dropping to a four month low, the result reflected 13 straight months of growth in the Eurozone's private output. The expansion was supported by higher business for services providers (51.6 vs 52.4 in December 2025) and a rebound for manufacturing (50.5 vs 48.9). New orders at the aggregate level rose for a sixth month, although at a sharply lower magnitude with restriction from a fall in export orders. Despite growth in output and new business, firms cut back on their employment levels at a marginal pace, mainly due to lower employment in Germany. On the price front, input cost inflation rose to a near one-year high, driving output charges to accelerate to its highest since April 2024. Looking forward, business sentiment rose to a 20-month high on greater optimism or manufacturers.