Financial News: Eurozone Private Sector Shrinks Marginally

Eurozone Private Sector Shrinks Marginally

(RTTNews) - The euro area private sector contracted only fractionally in December as services activity bounced back, final results of the purchasing managers' survey by S&P Global showed on Monday.

The composite output index rose to 49.6 in December from 48.3 in the previous month. The score was slightly above the flash estimate of 49.5.

Nonetheless, the index reading was in the sub-50.0 contraction territory again in December.

The services Purchasing Managers' Index registered 51.6 in December, up from 49.5 in the previous month. The flash reading was 51.4. The score above the threshold 50.0 suggested expansion.

The PMI survey showed that demand for goods and services declined again in December, marking seven straight months of falling new orders. At the same time, employment fell at the joint-sharpest pace in four years.

Nonetheless, companies were able to reduce their volumes of work-in-hand. Further, there was an intensification of inflationary pressures.

Firms were more optimistic about the coming year and sentiment rose to the highest level since September.

The contraction in the currency bloc during December was entirely manufacturing-led as services activity rebounded in December. The big-three eurozone economies of Germany, France and Italy all logged reductions in business activity.

France was the weakest-performer, followed by Germany, while Italy saw just a marginal decrease in output. Meanwhile, Spain bucked the contraction trend and posted another expansion in economic activity. The French private sector extended the current downturn to four months in December. Nonetheless, the composite output index improved to 47.5 from November's ten-month low of 45.9.

The services PMI also improved from the prior month. The corresponding index posted 49.3 compared to 46.9 in November, which was the lowest in ten months.

Germany's composite output index also remained inside sub-50 contraction territory. The uptick in services activity was not enough to offset declining manufacturing output. The composite output index hit 48.0. But this was up from November's nine-month low of 47.3 and the flash score of 47.8.

The services PMI advanced to 51.2 from 49.3 in the previous month. The flash reading was 51.0.

Italy's private sector downturn was only marginal amid a renewed activity growth at services and a softer fall in manufacturing output. The composite output index rose to 49.7 in December from 47.7 in the previous month. The services sector returned to growth at the end of the year, ending a brief period of contraction. The services indicator climbed to 50.7 from 49.2 in November.

On the other hand, Spain's private sector growth improved to its highest level since March 2023. The composite output index rose to 56.8 from 53.2 in the prior month.

The services sector logged the steepest rise in output for 20 months and manufacturing showed faster growth. The services PMI surged to 57.3 from 53.1 in November.

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