Eurozone: Composite PMI rests at one-year high
December 16, 2016
Recent data suggest that business activity in the Euro area has shored up. The preliminary Eurozone Composite Purchasing Managers’ Index (PMI), produced by IHS Markit, was steady at 53.9 in December, the highest reading since December 2015. The result was in line with market analysts’ expectations.
December’s upbeat reading reflected stronger activity in the manufacturing sectors. Employment, new business and backlogs of work all increased at a fast pace, similar to the previous month. However, growth eased in the services sector. Price pressures intensified in December due to higher import costs and rising commodity prices.
Regarding the two largest Eurozone economies, economic conditions improved notably in France and remained strong in Germany. Elsewhere in the region, economic momentum eased slightly compared to the previous month. Commenting on the result, IHS Market analysts stated that, “while the December PMI surveys put the eurozone economy on a strong footing to start 2017, there is clearly the potential for political uncertainty to derail growth as elections loom in the Netherlands, France and Germany, and Brexit discussions begin.”