February PMIs for the Eurozone, Japan and China all pointed toimprovements in operating conditions, but their respective levelswere lower than one month ago. The main factor leading the EurozonePMI lower was a sharp decline in the health of the Spanishmanufacturing sector, where conditions suffered their greatestdeterioration since December '01.

At 52.4 in February, the Global Manufacturing Output Indexsignaled an increase in production for the 58th successive month.Growth of output remained broad-based across the majority of theworld manufacturing sector, though reports of slower rates ofexpansion were also widespread. Growth steadied in the Eurozone, asstrong expansions in Germany and France offset a markedcontractionin Spain. Growth in the Asia-Pacific region was slower than onemonth ago, as rates of increase eased in Japan, China andIndia.

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