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EUROZONE DATA: EZ Composite PMI Still Lacklustre But Price Pressures Firm

EUROZONE DATA
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  • The Eurozone services PMI was revised higher in December from a preliminary 51.4 to 51.6, leaving it with a complete reversal of the slide to 49.5 in Nov.  
  • France drove the upward revision (from 48.2 to 49.3 to also more firmly bounce from the 46.9 in Nov) although Germany was also revised higher from 47.8 to 48.0.
  • Whilst already implied, new data showed peripherals continued to outperform in Dec with the Spain jumping from 53.1 to 57.3 (highest since Apr’23) and Italy rising from 49.2 to 50.7 (albeit only highest since Oct).
  • Composite activity remains lacklustre though. The Eurozone composite PMI was revised up a tenth to 49.6 to lift further from a particularly weak 48.3 in Nov, but nevertheless marked a fourth month at or below 50.0.
  • The press release notes “sustained falls in new business and employment”, with “seven straight months of falling new orders”.
  • Broader expectations for growth in the coming year saw their strongest since Sept albeit with confidence still “subdued” when compared with the historical average.
  • Price pressures accelerated however: Input cost inflation saw its fastest since July, led by a “notable uptick” for services companies whilst factories input costs were unchanged. Charge inflation hit a four-month high against that backdrop but there’s that same disparity by sector, with discounting by goods producers versus “more aggressive price setting in the services industry driving overall output charge inflation up”.
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  • The Eurozone services PMI was revised higher in December from a preliminary 51.4 to 51.6, leaving it with a complete reversal of the slide to 49.5 in Nov.  
  • France drove the upward revision (from 48.2 to 49.3 to also more firmly bounce from the 46.9 in Nov) although Germany was also revised higher from 47.8 to 48.0.
  • Whilst already implied, new data showed peripherals continued to outperform in Dec with the Spain jumping from 53.1 to 57.3 (highest since Apr’23) and Italy rising from 49.2 to 50.7 (albeit only highest since Oct).
  • Composite activity remains lacklustre though. The Eurozone composite PMI was revised up a tenth to 49.6 to lift further from a particularly weak 48.3 in Nov, but nevertheless marked a fourth month at or below 50.0.
  • The press release notes “sustained falls in new business and employment”, with “seven straight months of falling new orders”.
  • Broader expectations for growth in the coming year saw their strongest since Sept albeit with confidence still “subdued” when compared with the historical average.
  • Price pressures accelerated however: Input cost inflation saw its fastest since July, led by a “notable uptick” for services companies whilst factories input costs were unchanged. Charge inflation hit a four-month high against that backdrop but there’s that same disparity by sector, with discounting by goods producers versus “more aggressive price setting in the services industry driving overall output charge inflation up”.
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