The seasonally adjusted business activity and new sales orders indices, which have the biggest weighting, drove the robust increase in February.
New sales orders, a leading indicator, and expected business conditions increased further, pointing to a supportive environment for business in the next few months.
Eurozone stuck in contraction territory
The eurozone’s manufacturing sector contracted for the seventh straight month in February, with factories in the bloc’s struggling indebted states facing some of the toughest conditions on record.
It looks increasingly possible that the 17-member eurozone is stuck in a mild recession, as new orders continue to fall and backlogs of work dry up, even in the region’s most healthy economy Germany.
Markit’s Eurozone Manufacturing Purchasing Managers’ Index rose to 49.0 last month from January’s 48.8 in line with a flash reading, but has now been below the 50 mark that divides growth from contraction since July.
“Whether the eurozone will sink back into recession in the first quarter remains highly uncertain. The periphery remains the major concern,” said Chris Williamson, chief economist at data provider Markit.
However, new factory orders for Asia’s manufacturing powerhouses perked up in February, easing some concerns about the global economic slowdown.
China’s factories grew more than expected in February as new export orders for big firms bounced back, according to a government PMI. The official PMI rose to 51.0, above expectations of 50.7 and higher than 50.5 in January.
Private sector PMIs on Thursday pointed to some improvements in factory activity in China, India and Taiwan, although in China it also showed smaller companies lagging a rebound at larger companies.
HSBC’s China PMI stood at 49.6, a shade higher than January’s reading of 48.8, but still under the 50-point threshold demarcating expansion from contraction.