The final data published by HCOB showed that private sector activity contracted again in December, but at a slower pace compared to November. There was also an intensification of inflationary pressures, while firms’ growth expectations for the coming 12 months remained weak, despite improving to a three-month high.
The eurozone composite PMI output index, which assesses the change in activity in the manufacturing sector and the service sector, rose to 49.6 points in December from 48.3 points in November. Economists had expected an increase to 49.5 points. An index value below 50 points indicates a reduction in activity in the sector. As for the eurozone countries, Germany, France and Italy all posted reductions in business activity. France was the weakest-performing, followed by Germany, while Italy saw just a marginal decrease in output.
Meanwhile, the eurozone services PMI reached 51.6 compared to 49.5 in November and forecasts at 51.4.
The data also showed that new orders in the private sector declined again in December (for the 7th month in a row). Meanwhile, demand from non-domestic clients fell, stretching the current sequence of decline that has been ongoing for almost three years. The backlog of work declined again (for the 21st month in a row), along with another drop in employment in the private sector. The reduction in staffing levels was the joint-sharpest in four years (matching that seen in October). Meanwhile, the business sentiment improved in December, with expectations for growth in the coming year picking up to their strongest since September. As for the inflationary situation, the input costs rose at a pace that was the fastest since July and stronger than the pre-pandemic survey average. Eurozone factories recorded no change in their expenses, whereas services companies saw a notable uptick