– Economic activity in the Eurozone remains in positive territory, but is growing at a slower pace compared to the final months of 2015. In fact, the PMI (Purchasing Managers Index) developed by Markit (it is, however, preliminary data) amounted to 53.5 points in January, down from 54.3 in December (composite index, which is a summary analysis of the sector manufacturing and services).
What causes this slight decline? A number of factors, such as the financial turmoil and the war in oil prices, the circumstances that are causing a negative effect on growth. In essence, the weak euro and the general fall in prices are not supporting adequately the demand, so economic activity slows.
The ECB had already warned about the downside risks (uncertainties related to geopolitical issues to those relating to the prospects for global growth), but a concern is particularly low inflation. The PMI services thus fell to a minimum of one year, ie to 53.6 points from 54.2 the previous month.
The manufacturing index fell in January, instead, to 52.3 from 53.2 points at the end of 2015. These data, in any case, they represent a phase of expansion. The threshold basis of 50 points, in fact, separates growth from contraction.
Even in Germany, Europe’s largest economy, business has slowed down while reaching well above 50 points. In January, the composite PMI reaches 54.5 points, down from 55.5 in December 2015. Specifically, the manufacturing sector fell to 52.1 points from 53.2 (the lowest level in the last three months). Similar pattern to that of services: 56 points is now down to 55.4 points.
In France, by contrast, the index has returned to growth, mainly driven by the service sector that has performed well after the slowdown caused by the attacks in Paris on 13 November. In this way the composite index has increased reaching 50.5 points, after having stood at 50.1 in December. Manufacturing, after four months in expansion, fell to 50 points from 51.4. The services, in fact, that in December were in decline, are back in expansion to 50.6 points, a few tenths above expectations.
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