Eurozone: Composite PMI broadly stable in January
January 25, 2017
Recent data suggest that business activity remained firm in the Euro area at the start of 2017. The preliminary Eurozone Composite Purchasing Managers’ Index (PMI), produced by IHS Markit, was broadly steady at 54.3 in January, a notch below December’s five-year high of 54.4. The result undershot market analysts’ expectations of a slight rise to 54.5.
January’s reading reflected robust activity in both the manufacturing and services sectors. Notably, Eurozone employment grew at the strongest pace since February 2008. Rising exports supported strong activity in the manufacturing sector and firms’ expectations for future growth rose in January. Price pressures intensified in January reflecting higher import costs and rising commodity prices.
Regarding the two largest Eurozone economies, economic conditions improved in France but slowed in Germany. Elsewhere in the region, economic momentum eased slightly compared to the previous month but remained solid overall. Commenting on the result, IHS Market analysts stated that, “firms’ expectations about the year ahead are running at the highest for at least four-and-a-half years, highlighting how political risk continues to be widely eschewed, with companies focusing instead on expanding their sales in the coming year.”