Euro Area Manufacturing Gains Momentum as Services Activity Stalls

The euro area's manufacturing sector showed signs of strengthening in February 2026, according to flash PMI data from Commerzbank economists.

This is a welcome shift after a prolonged period of contraction, but the recovery remains fragile and heavily reliant on external demand.

In contrast, the services sector saw its activity index dip closer to stagnation, reflecting softer consumer demand and a cooling in business services.

The mixed signals complicate the European Central Bank's assessment of the economy, with Commerzbank economists arguing that the ECB is likely to hold off on further rate hikes until there is clearer evidence that the services sector is stabilizing.