MADRID, 21 Feb. (EUROPA PRESS) -

Private sector activity in Germany and France, the two largest economies in the European Union, has returned to expansionary territory in February, after eight and seven months, respectively, according to the preliminary reading of the composite index of Purchasing Managers (PMI), prepared by S

In the case of Germany, the composite PMI index for February stood at 51.1 points from 49.9 in January, its highest level in eight months, thanks to the improvement in the services PMI, which rose to 51 .3 from 50.7, also at eight-month highs, while the manufacturing PMI hit three-month lows, dipping to 46.5 from 47.3.

For its part, the French composite PMI improved in February to 51.6 points, compared to 49.1 the previous month, thanks to the boost in services, with a PMI of 52.8 from 49.4 points. January, while the manufacturing PMI has weakened to 47.9 points, compared to 50.5 in January, its worst reading in four months.

In the case of Germany, Phil Smith, an economist at S

He also pointed out that the cooling off of demand in the goods-producing sector and the subsequent relaxation of supply chain pressures have caused the costs of inputs to begin to fall, although manufacturers "continued to increase their production prices at a solid pace", indicating that core inflationary pressures remain elevated.

On its side, however, the rate of increase in the average prices charged for goods and services continued to slow, to its lowest level since May 2021.

As for France, the economist de S

"However, it is difficult to say for sure if we are at a turning point and if the French economy is now on the road to recovery," he warned, as the slowdown in the manufacturing sector intensified in February and demand conditions within of this sector clearly remain fragile.

"The probability of further interest rate hikes also remains, posing a risk to demand and activity," he added.