Economic growth was slightly weaker than originally thought in mid-quarter. The flash 51.1 composite output index was trimmed to 50.7, now just 0.7 points above the expansion threshold and 0.8 points stronger than its final print at the start of the year.

The negative headline adjustment in part reflected a softer service sector where the 51.3 flash sector PMI was lowered to 50.9, now just 0.2 points higher than its final January outturn.

Growth of new orders finally moved back above zero, but only just as overseas demand continued to contract. Backlogs were also up for the first time in six months and gains here prompted another increase in headcount, albeit at its weakest rate in almost two-and-a-half years. Business sentiment about the year ahead strengthened further but remained well below levels seen prior to Russia's invasion of Ukraine.

Input costs continued to climb steeply on the back of higher wages and elevated energy charges. In turn, this led to a further marked increase in output prices although negative base effects saw inflation ease for a fifth straight month and to its weakest level in a year.

In sum, the updated February results still suggest that GDP growth could be positive this quarter but any increase in total output is likely to be only minor. Manufacturing is struggling and overall demand remains soft. The German ECDI (minus 3) and ECDI-P (minus 8) are both in negative surprise territory but close enough to zero to signal overall economic activity evolving much as the forecasters anticipated.

No revisions are expected to the flash report.

The Composite Purchasing Managers' Index (PMI) provides an estimate of private sector output for the preceding month by combining information obtained from surveys of around 1,000 manufacturing and service sector companies. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster is output growing (contracting). The report also contains the final estimate of the services PMI. The data are provided by S&P Global.

The Purchasing Managers Index (PMI) survey has developed an outstanding reputation for providing the most up-to-date possible indication of what is really happening in the private sector economy by tracking variables such as sales, employment, inventories and prices. The indices are widely used by businesses, governments and economic analysts in financial institutions to help better understand business conditions and guide corporate and investment strategy. In particular, central banks in many countries (including the European Central Bank) use the data to help make interest rate decisions. PMI surveys are the first indicators of economic conditions published each month and are therefore available well ahead of comparable data produced by government bodies.