Eurozone services sector powers ahead in February

The Eurozone’s services sector powered ahead in February as growth starts to take hold in the region.

The Eurozone purchasing managers' index (PMI) for the services industry hit 53.7 last month, better than January’s reading of 52.7.

That data was however lower than an earlier flash reading of 53.9 but encouragingly, remains well above the 50 mark which divides contraction from expansion. With the sector above 50, the data confirms that the euro-area’s services industry is firmly in growth mode.

According to Markit, which compiles the survey, the Eurozone composite output index, which combines services and industry readings, is up to 53.3 in February from 52.6 in January, the highest level in seven months. “The improvement in data was driven by stronger inflows of new business and rising business confidence, suggesting growth should continue to pick up in March,” said Chris Williamson, chief economist at Markit.

Within the data, Ireland and Spain were both standout winners - their composite PMIs reached 60.7 and 56 respectively.
In European equity marketed stuttered on Wednesday as traders cut risk ahead of Thursday’s crucial policy meeting by the European Central Bank. Germany’s DAX fell 0.2% while the Stoxx600 index was flat.

In FX markets, the euro was nearing an 11-year low against the dollar as traders sold the currency ahead of details likely due Thursday from the ECB on how it plans to buy €60bn of bonds per month. On Wednesday, the euro declined by 0.5% to $1.1116, trading close to its 11-year low last hit on January 26 this year.