Euro Area: Business-activity slump softens in January
The HCOB Global Composite Purchasing Managers’ Index (PMI) rose to 47.9 in January from 47.6 in December. Consequently, the index remained entrenched below the 50 no-change threshold, signaling another deterioration in business conditions compared to the prior month.
The services PMI contracted at a faster pace in January, while the manufacturing PMI recorded a slower pace of contraction. Output and new orders continued to fall at sustained albeit softer paces, while business confidence improved but remained downbeat. Moreover, employment increased slightly following two consecutive months of contraction. On the price front, input cost inflation cooled, while output price inflation accelerated.
Commenting on the release, ING’s Bert Colijn stated:
“The eurozone economy continues to trend around 0% growth and there are no signs of any imminent recovery. Price pressures are still increasing for the service sector, which provides another argument for the ECB not to cut before June.”