Eurozone Businesses Show Modest Growth in January
Eurozone businesses registered a modest pickup in activity at the start of the year, as a stable performance in services was complemented by an easing in the manufacturing sector's protracted downturn, a survey indicated.
The flash composite Eurozone Purchasing Managers' Index (PMI) compiled by S&P Global rose to 50.2 in January from December's 49.6, marginally above the 50-mark threshold that divides growth from contraction. A Reuters poll had projected a modest increase to 49.7.
An index gauging the region's dominant services sector dipped slightly to 51.4 from 51.6, remaining above the breakeven point and marginally below the Reuters poll forecast of 51.5. However, demand growth remained subdued, suggesting that a significant rebound is not imminent. The new business index improved to 50.7 from 50.2.
Manufacturing activity, which has been declining since mid-2022, showed signs of improvement with the headline PMI jumping to 46.1 from 45.1 in December. The Reuters poll had anticipated a more modest increase to 45.3. An output index that contributes to the composite PMI remained below 50 but climbed to 46.8 from 44.3, its highest reading in eight months.
Despite facing rising raw material costs, manufacturers held their prices steady, with the input prices index reaching a five-month high of 51.6 from 50.0. Pointing to a lack of expectations for a substantial upturn in activity, firms slightly reduced their workforce in January. The composite employment index rose to 49.8 from 49.2, remaining close to breakeven.