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2026-02-20 16:32:59
[German PMI Breaks Through, Eurozone Engine Resumes Expansion After Three and a Half Years] ⑴ German private sector economic activity accelerated to a four-month high in February, signaling a clear economic turnaround. The preliminary HCOB Composite Purchasing Managers' Index rose to 53.1, far exceeding market expectations of 52.3, and has remained in expansion territory for several consecutive months. The chief economist at Commerzbank stated that this confirms the signs of economic recovery seen in January. ⑵ The service sector continued its steady growth, becoming the main engine driving overall economic growth. The February services PMI rose to 53.4, a four-month high, significantly higher than the expected 52.3. This data indicates that the resilience of the service sector, a core pillar of Europe's largest economy, is translating into substantial growth momentum. ⑶ The breakthrough in manufacturing is even more significant. The February manufacturing PMI jumped from 49.1 to 50.7, returning to expansion territory for the first time since June 2022, and significantly exceeding market expectations of 49.5. This performance, crossing the 50-point mark, suggests that the three-and-a-half-year contraction cycle in manufacturing may be coming to an end, injecting key momentum into the overall economic recovery. (4) Leading indicators have already laid the groundwork for this rebound. German industrial orders unexpectedly recorded their largest increase in two years last December, foreshadowing a recovery in production. Combined with current PMI data, economists predict that unless there is a significant slump in March, first-quarter GDP will achieve substantial growth, but the data does not yet show this indication. (5) However, concerns remain regarding the job market. Although the overall pace of layoffs has slowed, factory employment remains in contraction, marking the second-lowest decline in nearly two and a half years. Businesses continue to weigh expansion expectations against cost pressures, and a full recovery still requires substantial improvement in the job market for confirmation.
