February PMIs for the Eurozone, Japan and China all pointed to improvements in operating conditions, but their respective levels were lower than one month ago. The main factor leading the Eurozone PMI lower was a sharp decline in the health of the Spanish manufacturing sector, where conditions suffered their greatest deterioration since December '01.

At 52.4 in February, the Global Manufacturing Output Index signaled an increase in production for the 58th successive month. Growth of output remained broad-based across the majority of the world manufacturing sector, though reports of slower rates of expansion were also widespread. Growth steadied in the Eurozone, as strong expansions in Germany and France offset a markedcontraction in Spain. Growth in the Asia-Pacific region was slower than one month ago, as rates of increase eased in Japan, China and India.

February data pointed to only a moderate increase in global manufacturing new orders, with that index the weakest since June '03. Weaker demand was recorded in many of the world's major producing regions, with new orders falling for the second consecutive months in the UK and Italy and at the fastest rate in over six years in Spain. New business in Europe, measured overall, and in Japan were only marginal, whereas growth remained robust and above global average in China and India.