recession in Eurozone may not be as deep as originally thought. Business activity in the eurozone contracted less than originally expected late last year as price pressure eased, according to a related study by S&P Global. The picture emerges from the S&P Global Composite Purchasing Managers’ Index (PMI) for the eurozone, which is always considered indicative and reliable in terms of the health of the economy, Reuters reported. The index rose to 49.3 in December from 47.8 in November, beating early estimates of a smaller gain to 48.8.
The index has, of course, remained below the 50 mark since July, which separates growth from contraction. However, its latest indicator, formed in December, is a five-month high. The final data was collected earlier than usual last month due to the holiday season. As S&P senior economist Joe Hags noted, “The eurozone economy continued to deteriorate in December, but the strength of the recession eased for the second month in a row, temporarily pointing to a slowdown in the economy that may be milder than initially expected.” However, he added that “still, there is little evidence in the survey results that the eurozone economy could soon return to substantial and stable growth.”
What the data from the S&P Global survey of business activity at the end of last year shows.
After all, it was preceded by a December poll of economists and analysts by Reuters, who concluded that the eurozone economy contracted by 0.3% last quarter and will contract by 0.4% in the first quarter of the new year. Overall demand has fallen for the sixth month in a row, albeit at a milder pace than originally thought. The new business PMI rose to 47 from 45.8, higher than the original estimate of 46.5.
The PMI index, which covers the block’s dominant service sector, stung to 49.8 from 48.5 in November. Initial estimates indicated a slight increase to 49.1 points.
Price pressure in the industry eased last month, although it remained elevated. The producer price index fell to 61 from 62.3, the lowest level since August.
Source: Kathimerini
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