The final data published by HCOB showed that activity in the eurozone private sector did not change in December, and remained in contraction territory. However, businesses’ growth expectations have improved, reaching the highest level in 7 months (albeit remaining subdued by historical standards).
The Eurozone Composite PMI Output Index, which assesses the change in activity in the manufacturing sector and the service sector, was 47.6 points, as in November. Economists had expected a decline to 47.0 points. The index remains below the 50-point mark, which indicates a reduction in activity in the sector, for the seventh month in a row. Meanwhile, the services PMI rose to 48.8 points from 48.7 points in November. Consensus estimates suggested a drop to 48.1 points.
The data also showed that both manufacturing and services saw output decrease in December, with rates of contraction broadly unchanged from the previous month. Meanwhile, new orders in the private sector fell again in December, but the rate of decline was the weakest since July 2023. The volume of new export orders decreased sharply, and at a faster rate than the total volume of new orders. The backlog of orders in the private sector also fell, recording the ninth consecutive monthly decline. The rate of depletion slowed slightly to its weakest for five months, but was solid nevertheless. A steady decline in backlog of orders also contributed to a second consecutive monthly decline in employment. Although the pace of job cuts was only slight, they were the fastest in three years. However, there was a strengthening of firms’ growth expectations towards the year ahead. As for the inflationary situation in the private sector, the rate of increase in operating expenses was the softest in four months, but the rate of output charge inflation accelerated to a six-month high.