(Bloomberg) -- Business activity in the euro-area economy shrank for a fourth month in February as services struggled with continued lockdowns and factories ran into increasing supply constraints.

A composite gauge for both sectors stood at 48.1, slightly higher than in January but still below the 50 mark that separates expansion from contraction. Services deteriorated at the fastest pace since November, while manufacturing output rose the most in four months.

The region’s factories have been a stronghold through the crisis as they adapted more easily to health and safety restrictions than businesses relying on face-to-face interactions. They’re increasingly facing challenges though amid trade bottlenecks.

Delivery delays rose to near record levels, pushing input costs to the highest in nearly a decade. At the same time, confidence in the outlook has improved.

Companies across the region are “becoming increasingly upbeat about recovery prospects,” said Chris Williamson, chief business economist at IHS Markit. “Assuming vaccine roll-outs can boost service sector growth alongside a sustained strong manufacturing sector, the second half of the year should see a robust recovery take hold.”

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