Euro zone business growth stayed weak in December
(Reuters) – Euro zone business growth remained weak in December, with tepid foreign demand exacerbating a contraction in manufacturing and offsetting a slight pick-up in services activity.
IHS Markit’s Euro Zone Composite Flash Purchasing Managers’ Index (PMI), seen as a good guide to economic health, stayed at 50.6 in December, a touch below a median 50.7 predicted in a Reuters poll. Anything above 50 indicates growth.
The private sector business report published on Monday suggests the risks to the euro zone outlook remain skewed to the downside, despite Christine Lagarde’s more upbeat tone in her first news conference as head of the European Central Bank.
The PMI for the bloc’s dominant service industry rose to a four-month high of 52.4 from 51.9, and above 52.0 predicted in a Reuters poll.
The new export business sub-index contracted for the 16th straight month as the U.S.-China trade war dragged on.
The euro zone’s industrial sector has struggled throughout the year, with manufacturing activity contracting for the 11nth month in a row in December. The factory PMI fell to 45.9 from 46.9, below the 47.3 predicted in a Reuters poll.
An index measuring output, which feeds into the composite PMI, fell to 45.9 from 47.4, also marking the 11th month of contraction. New export orders contracted for a 15th straight month.
(Reporting by Rahul Karunakar; Editing by Hugh Lawson)