Data Interpretation

The latest Eurozone February PMI data reveals the sharpest contraction in eurozone construction sector for three months. New orders continue to contract, although business confidence has shown some improvement, remaining largely pessimistic overall. Despite a slight easing of cost pressures, weak market demand and labor shortages remain significant challenges to the sector's recovery.

The recently released U.S. PMI data for February indicates continued expansion in the services sector. While the business activity index experienced a slight decrease, it remains within the growth territory. New orders and employment indices have rebounded, and inflationary pressures have intensified. Supplier deliveries have slowed, and corporate confidence in future growth is influenced by tariffs and government policies.

The Fed's dual mandate of inflation and employment is showing signs of tension, as persistent price pressures and aggressive policy adjustments, including new import tariffs, are having a negative impact on consumer spending.

Amidst a global economic slowdown and escalating domestic political uncertainty, the Bank of Korea has opted to lower its benchmark interest rate. This strategic move aims to mitigate the adverse impacts of a potential economic downturn while simultaneously maintaining price stability. Despite persistent concerns regarding the foreign exchange market, inflation remains contained, and household debt continues to decelerate. Consequently, a significant contraction in economic growth is anticipated.

Data released on February 21 showed that the Eurozone Composite PMI for February stood at 50.2, unchanged from January, indicating that the overall economic growth momentum remained stable. The Manufacturing PMI rose to 47.3, a 9-month high, while the Services PMI fell to 50.7, a 3-month low. Despite the slowing decline in manufacturing, weak demand and falling employment still pose challenges to economic recovery.

HCOB Flash Germany Composite PMI Output Index at 51.0 (Jan: 50.5), 9-month high. HCOB Flash Germany Manufacturing PMI at 46.1 (Jan: 45.0), 24-month high. HCOB Flash Germany Services PMI Business Activity Index at 52.2 (Jan: 52.5), 2-month low.

Data released on February 21 revealed that France's Composite PMI fell to 44.5 in February, marking a 17-month low. The Manufacturing PMI rose to 45.5, a nine-month high, while the Services PMI declined to 44.5, also a 17-month low. The private sector economy in France contracted further in February, with the pace of business activity contraction accelerating to its fastest since September of the previous year.

The February PMI data for Japan indicates an accelerated expansion in private sector economic activity, with the composite PMI reaching a five-month high. While the service sector continued to expand, the manufacturing sector remained weak. Business confidence declined to its lowest level since 2021, reflecting the impact of inflation, labor shortages, and economic uncertainty.

The latest data on Australia's February PMI reveals an accelerated pace of expansion in private sector business activities, with a further increase in the growth rate of the services sector. However, manufacturing growth remains sluggish. Despite continued growth in the job market, business confidence in future economic prospects has declined, while inflationary pressures persist.