Euro area services activity grows modestly in February, PMI index rises to 52.8

The Euro area services activity sees growth in the month of February. The IHS Markit Eurozone Services Business Activity Index rose to 52.8 from January’s 51.2 and a three-month high. All nations saw growth in activity, albeit to varying degrees. Whilst France and Italy recorded marginal gains, activity levels in Germany, Ireland and Spain all rose to strong degrees.

There was a rebound in overall new business growth and, despite being modest, the rise in sales was sufficiently solid to place pressure on capacity. Backlogs of work increased in February after January’s fall, with Germany and Ireland recording the most acute rises in outstanding business.

These two countries also saw the most solid employment gains in the latest survey period. In all, private service sectors jobs in the euro area rose at a noticeable and accelerated rate in February. With demand for workers continuing to increase, there were several reports of higher salaries being paid. This aided to explain another sharp rise in overall service sector operating costs. Where possible, companies sought to protect margins through a strong increase in output charges.

Business sentiment rebounded in February to its highest level in four months, though remained below its trend level.

At 14:00 GMT the FxWirePro's Hourly Strength Index of Euro was slightly bullish at 73.7517, while the FxWirePro's Hourly Strength Index of US Dollar was bullish at 80.7619 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex