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The factory downturn did, however, help feed through to lower price pressures in the industrial sector, with pricing power clearly shifting from sellers to buyers amid the largest monthly improvement in suppliers' delivery times since 2009, S&P Global said.
The combination of elevated price pressures and economic resilience clearly adds to the case for further policy tightening at major central banks, it noted in an analysis.
It remains to be seen if February's upturn, having been aided by temporary factors such as warmer than usual weather and fewer supply shortages, can be sustained. Demand will need to rise further from current levels to ensure growth persists. In that respect, the future path of interest rates will clearly play a role.
Business activity rose across the four largest developed world economies (G4) in February, reviving after seven months of continual decline.
A weighted average of the headline composite PMI output index for the United States, eurozone, Japan and the United Kingdom rose for a second month, up from 48.5 in January to break though the 50 no change level with a reading of 51.3 in February, according to provisional 'flash' estimates. By rising above 50.0 the February survey index registered the first growth since June of last year.
Moreover, growth was recorded in all four economies for the first time since June of last year, painting an encouraging picture of a broad-based improvement.
Both the US and UK reported growth for the first times in eight and seven months respectively, while the eurozone grew for a second successive month—the rate of expansion accelerating to the highest since last May—and Japan eked out modest growth for a second month in a row.
Manufacturing meanwhile continued to lag, with output falling for an eighth successive month. The rate of contraction cooled, however, to the weakest seen over these past eight months, as both the eurozone and UK reported modest expansions in production and the United States decline eased to the slowest seen over the past four months, S&P Global noted.
In contrast, Japan' s manufacturing sector bucked the trend, with output declining at an accelerating rate, driven in part by slumping exports in a reflecting of subdued global trade flows.
The reduced upward pressure on raw material prices helped drive a slower rate of inflation for goods leaving the factory gate on average across the G4, with manufacturing output prices rising at the slowest rate for two years, it added.
Fibre2Fashion News Desk (DS)