Germany and France Weakness Somewhat Offset By Rest Of EZ

Note that the -0.6 point Services miss is smaller than the German (-1.7) and French (-1.0) equivalents, indicating that other EZ countries, namely Italy and Spain, likely performed relatively strongly in January according to the PMI. As the release notes, "the rest of the eurozone [ex- Germany and France] as a whole returned to growth after five months of decline, recording the largest – yet still modest – expansion since last June".

Key notes from the release are:

• "Although disruptions to shipping in the Red Sea caused supply chains to lengthen for the first time in a year, manufacturing input costs continued to fall on average".
• "However, service sector cost growth accelerated during the month, contributing to the steepest overall rise in prices charged for goods and services since last May".
• "Employment increased fractionally in January as a slight upturn in net hiring in the service sector offset an eighth successive monthly fall in manufacturing payroll numbers".
• Falls in manufacturing output and new orders continued to drive the downturn in the EZ, but "the fall in factory production was the smallest witnessed since last April". Meanwhile, "new business placed at service providers fell at the slowest rate since last July, providing a further hint of a cooling in the demand downturn".
• "January also saw the region’s export decline easing, with overall new export orders dropping at the slowest rate for nine months thanks to reduced losses for both goods and services".