Eurozone PMI Composite Output Index moved closer to the 50.0
Staff Writer |
The IHS Markit Eurozone PMI Composite Output Index moved closer to the 50.0 no-change mark in December.
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Registering a final reading of 51.1, down from 52.7 in November and lower than the earlier flash estimate of 51.3, the index was at its weakest level for over four years.
The slowdown in growth during December in part reflected lower activity in France, where the ‘gilets jaunes’ movement reportedly led to a first fall in economic output for two-and-a-half years.
That said, growth tended to weaken elsewhere, led by Germany which registered its weakest outturn for five-and-a-half years.
Italy bucked the broader downward trend, though output merely stabilised following two months of contraction.
The manufacturing and service sectors registered broadly similar modest growth outturns during December.
Goods producers recorded a slightly better increase in production than in November, but this was only achieved via a reduction in work outstanding and an accumulation of warehouse inventories rather than any improvement in demand.
On the contrary, new orders received by manufacturers deteriorated to the greatest extent in over four years.
With inflows of new business to service providers rising only modestly, composite data showed the weakest growth in new work since the end of 2014.
In spite of the slowdown of growth in activity and new work, labour market conditions in the eurozone continued to strengthen.
Job numbers increased in December for a fiftieth month in succession with the latest growth again solid, despite easing to the lowest since the start of 2017.
Job creation remained strongest in Germany and Ireland as firms here sought to keep on top of workloads.
Latest data suggested that such efforts were broadly successful as backlogs of work across the eurozone fell for the first time since January 2015.
The latest data on prices indicated that input costs continued to increase at an elevated rate at the end of 2018.
Wage and salary pressures remained a key driver of cost pressures.
However, with oilrelated goods reported to be dropping in price, especially for manufacturers, the net rise in overall input prices was the weakest recorded by the survey since August 2017.
Output prices also rose at a slower rate in December, with latest data showing inflation at its weakest for 15 months.
Business confidence continued to soften in December, slipping to its lowest level since October 2014.
In line with recent surveys, political and economic uncertainties relating to global trade and Brexit weighed on expectations.
Sentiment remained especially low in Germany (the weakest since October 2014). ■