Business activity was broadly stable in the final February data. The 48.9 flash composite output index was revised up 0.3 points to 49.2, some 1.3 points above its final January reading and essentially indicative of overall economic stagnation. The mid-quarter print was an 8-month high.

Activity in services was also revised stronger with the final sector PMI weighing in at 50.2, up 0.2 points versus its flash estimate and back into positive growth territory for the first time in seven months. New business was broadly stable and although backlogs again declined, employment rose at the fastest rate in eight months. Indeed, business expectations about the year ahead were the most optimistic in a year. Even so, inflationary pressures continued to build with both costs and output prices rising at an accelerated rate.

In terms of national composite output indices, the best performing member state was Ireland (54.4) which, along with Spain (53.9) and Italy (51.1) posted above 50. France (48.1) was close to stagnation, but Germany (46.3) remained mired in recession territory.

The final data will underpin hopes that the Eurozone economy is on the turn. However, even if this is the case, there are some ominous signs of cost and price pressures beginning to build again which will not sit at all well with the ECB. Accordingly, today's update reduces the chances of a cut in key interest rates in April and may also dampen speculation about a move in June. The region's RPI now stands at 15 and the RPI-P at 4. Economic activity in general is running just slightly ahead market expectations.

No revisions are expected leaving the composite output index at 48.9, up from January's final 47.9.

The Composite Purchasing Managers' Index (PMI) provides an estimate of private sector output for the preceding month by combining information obtained from surveys of the manufacturing and service sectors of the economy. 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 using a representative sample of around 5,000 manufacturing and services companies, the former including Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece and the latter Germany, France, Italy, Spain and the Republic of Ireland.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.