Eurozone: Stable PMI data with further weakening in manufacturing – ING

Bert Colijn, senior economist at ING, notes that Eurozone’s composite PMI was unchanged at 50.6 in December.

Key Quotes

“The eurozone's service sector remains resilient as the industrial recession is about to be extended into its third year. Service sector strength is boosted by a surprising labour market and contagion has been limited so far as problems in industry are in part concentrated in the auto sector and its supplying sectors. Still, whether this remarkable resilience can continue is the question as employment growth is slowing, weakening the prospects for domestic demand growth over the winter months.”

“The further weakening in the manufacturing PMI came as somewhat of a surprise as surveys had recently indicated that the downturn had been moderating. The continued manufacturing contraction throughout Q4 indicates that recession concerns, while moderating somewhat due to better geopolitical news, can still not be discarded for now.”